Shire sells oncology business to France's Servier for $2.4bn

Shire are displayed at a chemist's in northwest London Britain

While the Oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy.

A deal for Shire could be valued at as much as $50 billion, which would make it one of the biggest takeovers by a Japanese firm of an overseas company and far exceed Takeda's own market value of about $37 billion.

Ornskov said the board will consider returning the proceeds of the sale back to shareholders through a buyback programme. A Takeda spokesman declined to comment. Under UK takeover rules, Takeda has until April 25th to announce whether or not it will bid for Shire, which has a market value of around $47 billion.

Still, given the small contribution of the cancer business to Shire's overall profits, Deutsche Bank analysts said this was unlikely to be a deal breaker.

Shire also had debt of around $19 billion as of the end of 2017.

Shire gained as much as 3.5 percent to 3,732 pence in early trading in London.

Takeda said earlier this year that it might make an offer for Shire to beef up its core therapeutic areas. Ironically, Shire itself relocated its corporate headquarters to Ireland for tax reasons. Its oncology business had sales of $262 million previous year, putting the divestment on a respectable revenue multiple of 9.2 times.

Flemming Ornskov, Shire's CEO, suggested that other sell-offs might be possible after buying spree that culminated in the 2016 acquisition of Baxalta for $32 billion.

The Shire unit sells Oncaspar, used in the treatment of a form of leukemia, and Onivyde for pancreatic cancer, the Lexington, Massachusetts-based company said in a statement Monday. The portfolio also includes Calaspargase Pegol, which is current under review by the US Food and Drug Administration.

"As an essential step in the evolution of the group, this acquisition allows us to establish a direct commercial presence in the United States, the world's leading pharmaceuticals market, and to strengthen our portfolio of marketed products in the territories where Servier is already present", Laureau said.



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