Shire to sell oncology business to Servier for $2.4bn

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French pharmaceutical firm Servier has signed an agreement to acquire the oncology business of Shire for $2.4bn. Its biggest investors include US-based Blackrock, Capital Group and JP Morgan.

"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".

However, Takeda has said that expanding its oncology business was a significant reason why it was considering a bid for Shire, along with the desire to expand in along with gastrointestinal medicine and neuroscience.

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 United Kingdom group.

The deal is expected to complete in the second or third quarter of this year.

Takeda told numerous news outlets it had no comment on the Servier-Shire deal.

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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.

Britain has strict rules about the conduct of bids, including defensive actions taken by target companies.

Buying Shire would be transformational for Takeda but would be a huge financial stretch, since the company is worth around $10 billion more than the Japanese group. While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy.

"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". In 2017, the oncology business generated $262 million in revenue.

The deal also covers Calaspargase Pegol (Cal-PEG), which is under FDA review for the treatment of ALL, and early stage immuno-oncology pipeline collaborations.

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