Shire prepares new Baxalta bid
pharmafile | November 26, 2015 | News story | Business Services, Sales and Marketing |
Following rejection in an earlier bid, it has emerged that Shire is preparing a new takeover offer for US biotech firm Baxalta, which saw a considerable share jump after reports emerged quoting a source familiar with the matter.
If successful, the acquisition is set to create one of the world’s leading rare disease specialists, paving the way for advanced treatment in such conditions, with sales anticipated to amount to $20 billion by 2020.
Baxalta, a spin off company from Baxter International, rejected a $30 billion purchase offer from Shire four months ago which they believed undervalued the company, which in turn, has pushed Shire to consult advisers and renew its pursuit.
The announcement for the new offer comes three weeks after Shire announced its $5.9billion purchase of US Dyax Corp, specialists in rare diseases, while making clear that it had the financial muscle to get the Baxalta deal done.
Working with firms such as Morgan Stanley, Evercore and Deutsche Bank, Shire’s bid is thought to be constructed in shares and cash. Because the deal is still yet to take place the window for negotiation is still open.
However, the transition faces a bumpy road ahead due to Baxalta’s ‘poison pill’ takeover defence, which effectively stops unwanted investors from acquiring more than 10% of the company.
Currently, Baxalta is thought to have a market capitalisation of $22.7 billion, which in turn would complement Shire’s developing portfolio of high-priced treatments for rare or “orphan” diseases. For this reason, it is believed that for the past six months, Flemming Ornskov, Shire’s chief executive, has relentlessly perused merging with Baxalta, with the goal of doubling the company’s revenue over the next few years.
Developing biotech treatment for rare blood conditions, cancers and immune system disorders, Baxalta has a workforce of 16,000 individuals and had projected figures of $6 billion in 2014.
Yasmita Kumar
