After nearly being acquired by AbbVie last year Shire its now making its own major takeover move on Baxalta – but the Baxter spin-out is not making any deal easy.
The Ireland-based ADHD and rare disease specialist has pushed the unsolicited offer to buy Baxalta into the public domain, saying it has offered $30bn in stock to create a biotech company focused on rare diseases.
Shire urged Baxalta to “engage in a negotiated transaction” after the company refused to enter into talks, according to a statement.
Yesterday Shire’s CEO Flemming Ornskov wrote to the recently appointed chief at Baxalta, Ludwig Hantson, saying: “Your lack of engagement has been surprising. As a result, you have left us with no choice but to make our proposal known to your shareholders. We believe they deserve an opportunity to consider it.”
The decision to make the attempted purchase public – and share the deal with Baxalta’s shareholders – will likely put more pressure on Baxalta in the coming weeks.
The company was in fact just last month spun out from Baxter – earlier this year its former parent company said the firm would introduce 20-30 new products to the market between now and the end of the decade.
Pro forma sales for Baxalta will be $5.9bn in 2015 – roughly 4% down on 2014 – but will grow 6-8% a year between 2016 and 2020 thanks to the contribution of new drugs that will add around $2.5bn in revenues.
The specialist in haematology, immunology and cancer therapies has “a solid foundation and strong momentum,” according to a recent report from Hantson.
Baxter first announced its intention to separate its biopharma and medical technology businesses in March 2014, following the trend among drugmakers to trim down and focus their operations by divesting non-core units.
The new crop of products that Baxalta is banking on – and which Shire wants to gain access – include primary immunodeficiency therapy HyQvia, launched in the US last October, and long-acting haemophilia A therapy BAX 855 which is scheduled for introduction before the end of the year.
BAX 855 will help Baxalta maintain its haemophilia franchise – currently headed by recombinant Factor VIII product Advate – in the face of competition from Biogen and Bayer.
Flurry of deals and rumours
Shire has been in the mix of several major M&A deals in the past 18 months: just this week it paid out $300m to acquire eyecare specialist Foresight Therapeutics as part of a strategic fit with its investigational drug lifitegrast, which is in late-stage development for treatment of dry eye disease.
This came several months after the firm agreed to buy NPS for $5.2bn, gaining access to its lead product Natpara (recombinant parathyroid hormone) to treat low blood calcium levels in patients with the rare endocrine disease.
According to a report in the Sunday Times last month, Shire has already made an informal approach to rare disease specialist Actelion about a possible £12.4bn takeover – but the opening bid was turned down despite being a 20% premium on its recent share price.
Shire itself was also almost snapped up by AbbVie last year before a change to the way the US Treasury dealt with so-called tax inversion deals led to the deal being abandoned.
The deal could have been worth as much $55bn, and see AbbVie domiciled in Ireland, which has a much lower corporate tax rate than the US.