Takeda agrees $5.2bn deal to buy Ariad

Takeda has sped out of the traps with the first big pharma M&A deal of the New Year, agreeing to buy cancer firm Ariad for $5.2bn.

The deal - which has been approved by both companies' boards - will give Takeda rights to haematological cancer drug Iclusig (ponatinib) as well as a pipeline of oncology candidates currently headed by would-be blockbuster brigatinib.

The Japanese drugmaker is offering $24 per Ariad share, a 75% premium on Ariad's share price ahead of the announcement. 

It is the first major acquisition under Takeda chief executive Christophe Weber since he joined the company from GlaxoSmithKline (GSK) in 2014, after earlier negotiations with Valeant over the sale of its Salix unit came to nothing.

Analysts suggested Weber's first deal could be a pricey one, given the level of competition faced by both Iclusig and brigatinib in the increasingly hard-fought blood cancer category.

Sale of chronic myeloid leukaemia (CML) and acute lymphoblastic leukaemia (ALL) therapy Iclusig for were pegged back by safety concerns that emerged in 2013 but since then have started to gain ground, with sales predicted to reach $170m-$180m in 2016 from $125m the prior year.

The multi-targeted tyrosine-kinase inhibitor drug is facing stiff competition from other drugs in the class including Novartis' Glivec/Gleevec (imatinib) and generic equivalents in some markets. In addition, Ariad has been drawn into the drug pricing debate in the US, with lawmakers asking questions about price increases for the drug, but as it stands peak sales have been estimated at around $500m.

Meanwhile, ALK inhibitor brigatinib has already been filed for approval in the US for ALK-positive non-small cell lung cancer (NSCLC) patients who are resistant to treatment with Pfizer's Xalkori (crizotinib), and an FDA verdict is due before the end of April. 

The drug has breakthrough status in that indication from the FDA but will have to compete in the second-line setting with Novartis' Zykadia (ceritinib) and Roche's Alecensa (alectinib).

In a statement, Weber insisted that the deal provides value for money and said he sees "significant long-term sales potential" for Ariad's drugs.

"Opportunities to acquire such high-quality, complementary targeted therapies do not come often, and we are very excited about the potential for this transaction to benefit patients, our shareholders, and other stakeholders," he said.