Shire Announces Sale of Oncology Business to Servier for $2.4 Billion

Shire Plc agreed to sell its cancer unit to France's Servier SAS for $2.4 billion, tightening the USA -based drugmaker's focus on rare diseases and potentially making it more attractive to Takeda Pharmaceutical Co. as it considers a bid. Buying Shire would be transformational for Takeda but would be a huge financial stretch, since the company is now worth around $10 billion more than the Japanese group.

The deal works for Servier, which has been trying to build its presence in the oncology market for the last few years, by giving an immediate presence in the US. Its oncology business had sales of $262 million previous year, putting the divestment on a respectable revenue multiple of 9.2 times.

The portfolio also includes Calaspargase Pegol (Cal-PEG), which is under USA review for the treatment of ALL and early stage immuno-oncology pipeline collaborations, the firm noted. "We will continue to evaluate our portfolio for opportunities to unlock further value and sharpen our focus on rare disease leadership with selective disposals of non-strategic assets", said Chief Executive Officer Flemming Ornskov.

Shire's oncology business includes in-market products Oncaspar (pegaspargase), a component of multi-agent treatment for acute lymphoblastic leukemia (ALL), and ex-US rights to Onivyde (irinotecan pegylated liposomal formulation), which is part of a treatment regimen for metastatic pancreatic cancer post gemcitabine-based therapy. 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.

Proceeds from the sale is expected to go towards increasing optionality and Shire will consider returning the proceeds to shareholders through a share buyback.

Olivier Laureau, the group president of Servier, said the deal will enable the company to become a key global player in oncology.

For privately held Servier, acquiring Shire's oncology operation allows it to establish a direct commercial presence in the United States and boosts its presence in cancer.

Shire's London-listed shares were up as much as 1.8pc at the start of trading.

(Copyright © 2015. All Rights Reserved.)
 
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