Shire Stock Surges Following News of Possible Bid by Takeda

Takeda Pharmaceutical is considering bidding to takeover Shire Plc, a bid that could be more than $50 billion and represent the largest ever for the company. If it were to take over Shire, the position of Japan-based Takeda in drugs for gastrointestinal diseases, aliments of the nervous system and cancer would be given a big boost.

The acquisition would broaden the capabilities of Takeda in important areas as well as provide it with treatments currently in the late stages of testing, said the company in prepared statement on Wednesday.

Shire, which has its headquarters in Lexington, Massachusetts, and is listed in London, saw its shares soar by up to 26%.

The potential deal arrives amidst a series of transactions across the pharmaceutical industry, marked by the agreement of GlaxoSmithKline to buy Novartis AG out of a joint venture in consumer healthcare for $13 billion.

Pfizer as well as Merck are searching for buyers of their own over the counter segments, while Sanofi announced over $16 billion in acquisitions since the start of 2018.

Takeda announced that it was at the preliminary and exploratory stage related to a possible takeover and has yet to formally approach the board at Shire.

The company, based in Osaka, must announce what its intentions are by April 25 at 5 pm London time under takeover rules in the UK and said no certainty exists that it would be making a bid.

Takeda is the largest drug maker in Japan and signaled that it was ready to enter more deals and partnerships while it seeks to build its identity beyond Japan, where the population is shrinking making its growth opportunities limited.

With a $42 billion market value, it is smaller than its possible target for takeover after the rally made Wednesday by Shire following news of the possible takeover bid.

Takeda remains interested in acquisitions following its purchase for $4.7 billion of Ariad Pharmaceuticals Inc., in 2017, a biotech firm in the U.S, said CEO Christophe Weber during an interview last November.

He added that the company was focused mainly on forming more partnerships in research and moving its products pipeline into later development stages to help push growth.

Shire would hand Takeda a much broader portfolio that it has in the U.S. and an entrée into the market of hemophilia, which fits the stated goal of Weber for expanding into drugs that are more expensive targets to smaller groups of patients.