Shire share price outperforms as group offloads oncology business

Shire share price outperforms as group offloads oncology business

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.

Shire (Dublin, Ireland) has entered into a definitive agreement to sell its oncology business to Servier (Neuilly-sur-Seine, France) for $2.4 billion. Shire said the deal covers the transfer of its oncology arm including in-market products Oncaspar, a component of multi-agent treatment for acute lymphoblastic leukaemia and ex-US rights to Onivyde, which is a component of multi-agent treatment for metastatic pancreatic cancer post gemcitabine-based therapy. They might be returned to shareholders in the form of a share buyback, Shire says, when the Takeda offer period is over. A pursuit of Shire would be one of the biggest attempts by a Japanese company to buy a Western rival. While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy.

Takeda CEO Christophe Weber is ramping up the company's overseas takeover ambitions, as patent expirations and a shrinking domestic population limit opportunities at home.

The UK Takeover Panel gave the Japanese firm a deadline of April 25 to announce a firm intention to bid or walk away.


Shire gained as much as 3.5 percent to 3,732 pence in early trading in London.

The deal is expected to close in the second or third quarter this year. In 2017, the oncology business generated $262 million in revenue.

Shire's board of directors started looking at offloading the oncology business in December, and said that the process considered "multiple potential strategic buyers" across Europe, Japan and the US.

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