About 500 Kendall Square Baxalta Staffers in Limbo as Shire Merger Talks Drag On

About 500 Kendall Square Baxalta Staffers in Limbo as Shire Merger Talks Drag On May 19, 2016
By Alex Keown, BioSpace.com Breaking News Staff

CAMBRIDGE, Mass. – As Shire and Baxalta lumber toward finalizing their merger, there are about 500 Baxalta employees based in Kendall Square who do not know if their jobs will be kept when the deal is completed.

While no job is truly guaranteed, Baxalta employees have an added worry due to the circumstances of how Baxalta was acquired by Shire—a hostile takeover. Tim Van Biesen, head of Bain & Company’s health care division, told StatNews that employees caught up in a hostile takeover are not often welcomed with open arms by the acquiring company. Van Biesen said employees often end up leaving.

Although the federal government derailed a merger between Pfizer and Allergan earlier this year, Shire executives insisted the deal with Baxalta is still in the works. A meeting of Baxalta shareholders is set for later this month and they will consider whether to adopt the merger agreement with Shire.

In January, Shire finalized an agreement to acquire Illinois-based Baxalta. Nine days after Baxalta had launched, Shire approached the company with a stock-only deal worth almost $31 billion. In early August 2015, Shire went public with its offer in hopes of pressuring the Baxalta board and shareholders into considering the deal. After six months the Baxalta board agreed to the deal.

One of the treasures that Shire has in the deal is Baxalta’s presence in the white-hot pharma mecca of Kendall Square, a square mile of pharma and biotech heavy hitters. In December 2015, Baxalta opened the Kendall Square-based research facility focused on developing oncology therapies and biosimilars.

The merger of Shire and Baxalta will create a pharmaceutical company with one of the largest rare disease platforms, including Baxalta’s hematology drug, Adynovate, and Hyqvia, a next-generation subcutaneous immunoglobulin (IG) product to treat patients with primary immunodeficiency.

Shire's top drug is Vyvanse, for the treatment of attention deficit hyperactivity disorder (ADHD) and for moderate-to-severe binge eating disorder. Another rare disease drug in Shire’s arsenal is Cinryze for the treatment of hereditary angioedema, which is expected to generate $765 million. In October, Cinryze received Fast Track Designation from the U.S. Food and Drug Administration for intravenous administration in subjects with antibody mediated rejection in renal transplant recipients. A Dyax deal also beings another hereditary angioedema candidate into Shire’s pipeline. Dyax is developing DX-2930, which has shown tremendous success in treating patients with an 88 percent reduction in attacks.

In January, Shire completed its acquisition of Dyax. Dyax employs about 140 people, but there has not been word on what will happen to those employees, although a company spokesperson told the Boston Business Journal the company has been “impressed by the talented employees at Dyax and look forward to officially welcoming them to Shire.”

There is also a question as to what could happen with Dyax’s headquarters, which is about seven miles from Shire’s in Massachusetts.

Ireland-based Shire has quickly expanded from approximately 1,450 employees to more than 2,600 in Lexington, Mass. Shire is poised to become an even larger presence in the Bay State following acquisition of Baxalta. When factoring in the number of employees from Shire’s two latest acquisitions, the company could soon employ as many as 4,000 people in Massachusetts, about the same number as rival drugmaker, Biogen .

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