Shire To Sell Oncology Business to Servier for $2.4 BillionBy
Shire has agreed to sell its oncology business to Servier, a Suresnes, France-based pharmaceutical company, for $2.4 billion.
Shire’s oncology business includes in-market products, Oncaspar (pegaspargase), a component of a multi-agent treatment for acute lymphoblastic leukemia (ALL), and ex-US rights to Onivyde (irinotecan pegylated liposomal formulation), a component of a multi-agent treatment for metastatic pancreatic cancer post gemcitabine-based therapy. The portfolio also includes Calaspargase Pegol (Cal-PEG), which is under FDA review for treating ALL and two early-stage immuno-oncology pipeline collaborations.
Under the agreement, Servier has agreed to acquire Shire’s oncology business for a total consideration of $2.4 billion, in cash. In 2017, the oncology business generated revenues of $262 million. The gross assets that are the subject of the transaction are approximately $1.6 billion and the profits attributable to the assets being transferred are approximately $140 million, excluding depreciation, amortization, and other direct and indirect costs.
The transaction constitutes a Class II transaction for the purposes of the UK listing rules and, as such, Shire shareholder approval is not required. The transaction has been approved by Shire’s Board of Directors and is expected to close in the second or third quarter of 2018.
Shire’s Board of Directors initiated the potential divestment of the oncology business in December 2017. The process, which commenced in January 2018, identified multiple potential buyers across the US, Europe and Japan.
“The proceeds from the transaction increase optionality, and Shire’s Board will consider returning the proceeds of the sale to shareholders through a shareholder-approved share buyback after the current offer period regarding Takeda’s possible offer for Shire concludes,” said Flemming Ornskov, Shire’s Chief Executive Officer in an April 18. 2018 company statement.
In early April 2018, Takeda Pharmaceutical confirmed that it was considering making an approach to Shire regarding a possible offer for the company. Under UK takeover rules, Takeda has until April 25, 2018 to either announce a firm intention to make an offer for Shire, subject to conditions or pre-conditions, as relevant, or that it does not intend to make an offer. Shire is headquartered in Dublin, Ireland, but is registered officially in the Bailiwick of Jersey, a British Crown dependency and part of the British Isles.
For Servier, the proposed acquisition of Shire’s oncology business is part of a plan to increase its presence in the US. “The acquisition of Shire’s oncology franchise enables Servier to meet its strategic ambitions to become a key player in oncology globally. It is a major step in the transformation of the Group, allowing us to establish a direct commercial presence in the US as well as to strengthen our portfolio of marketed products in the ex-US territories where Servier is already present,” said Olivier Laureau, President of Servier Group, in an April 16, 2018 company statement.
After closing, Servier’s products will be commercialized in the US through a newly created subsidiary, Servier Pharmaceuticals LLC. Servier is already present in the US through several agreements with private and public partners and the Servier BioInnovation office. Located in Cambridge, Massachusetts, this new facility, opened in February 2018 to identify new R&D opportunities and to intensify business development and licensing activities in the US.