Shire selling oncology unit to France's Servier for $2.4bn

  • Shire selling oncology unit to France's Servier for $2.4bn

Shire selling oncology unit to France's Servier for $2.4bn

Shire, the London-listed rare diseases specialist that is a potential takeover target for Japan's Takeda Pharmaceutical, is selling its oncology business to unlisted French drugmaker Servier for $2.4 billion.

Shire was at pains to point out that it started exploring the sale of oncology in December and commenced the disposal process in January, during which it identified multiple possible U.S., European and Japanese buyers. Late last month, Takeda confirmed that it is considering an acquisition, though at the time, it said no offer had been made.

The UK Takeover Panel gave the Japanese firm a deadline of April 25 to announce a firm intention to bid or walk away. He added that the company will review its portfolio for other assets to sell "to unlock further value and sharpen our focus on rare disease". The market value of Shire is about $47 billion.

Ornskov said the board will consider returning the proceeds of the sale back to shareholders through a buyback programme.

"We are confident that Servier will continue to invest in this business and our colleagues who are expected to transfer as part of the transaction in order to meet the needs of cancer patients globally".

In a prepared statement, Shire CEO Flemming Ornskov said that though the cancer business-which includes two marketed drugs-was profitable, the company concluded it is not core to Shire's long-term strategy. "Shire also had debt of around $19 billion as of the end of 2017".

Past year the Oncology business created revenues of $262 million.

Oncaspar is a component of multi-agent treatment for acute lymphoblastic leukemia, while Onivyde is a component of multi-agent treatment for metastatic pancreatic cancer post gemcitabine based therapy.

If Takeda does make an official bid for Shire, this sale might make it slightly more affordable.

Servier bolstered its oncology business last year by boosting its cancer-related share of R&D activity over the past two years from 14% to 37% today, with plans to reach 50% within the next two years.

Servier Group president Olivier Laureau said: "It is a major step in the transformation of the Group, allowing us to establish a direct commercial presence in the United States, as well as to strengthen our portfolio of marketed products in the ex-US territories where Servier is already present". Meanwhile, privately held Servier says adding Shire's cancer drugs will give it a commercial presence in the US while also strengthening its portfolio in the parts of the world where the France-based company is already established.