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Takeda’s possible US$50bn Shire bid thrown into doubt as UK pharma sells off oncology unit for US$2.4bn

Takeda is reportedly preparing to launch a bid for Shire before the April 25 deadline, but Shire’s oncology unit was one of the key reasons it wanted the takeover in the first place
cancer cells
Without its oncology unit, it remains to be seen whether Takeda is still interested in Shire

Shire PLC (LON:SHP) has agreed to sell off its oncology division to French pharma group Servier for US$2.4bn, raising doubts over the likelihood of a bid from Japanese drugmaker Takeda.

Takeda, which is Japan’s largest drugmaker by sales, first revealed its interest in Shire at the end of March and is said to be weighing up a US$50bn bid for the UK group.

Is Takeda still interested?

At the end of last week, a report from Reuters citing two sources with direct knowledge of the matter claimed Takeda has even gone so far as sounding out potential lenders to help fund the deal.

But Monday’s news that Shire has sold off its cancer treatment unit – which includes its ONCASPAR (leukaemia) and ONIVYDE (pancreas) treatments – has thrown that possible takeover into doubt.

Takeda had identified oncology, along with gastroenterology and neuroscience, as one of the key therapeutic areas which would benefit from the acquisition.

Under UK takeover rules, the Japanese firm has until April 25 to announce whether or not it will make a bid for Shire.

As for Monday’s sale, Shire said the oncology unit – which brought in US$262mln in revenue last year – was no longer part of its future plans.

Proceeds possibly returned to shareholders

“This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio,” said Shire chief executive Flemming Ornskov.

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

Ornskov added that the company would consider returning the proceeds to shareholders through a share-buyback “after the current offer period regarding Takeda's possible offer concludes”.

In late morning trading, Shire shares were up 1.3% at 3,653.5p.

In a note to clients, analysts at Liberum Capital commented: “Strategically this is not a big move given the small size and is not entirely unexpected given Shire is clearly sub-scale in oncology.

“We view the implications for the ongoing Takeda situation as limited given we don’t think oncology was the key element in Takeda’s interest.”

Liberum repeated a ‘hold’ rating and 4,000p price on Shire’s shares.

 -- Updates share price, adds broker comment --

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