Ariad Stays Mum on Layoffs After Takeda's $5.2 Billion Takeover
January 27, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Takeda Pharmaceutical recently acquired Cambridge, Mass.-based Ariad Pharmaceuticals for $5.2 billion. Employees of the company, naturally, are concerned about possible layoffs, but for the most part Takeda has kept quiet on its severance plans.
Recent filings with the U.S. Securities and Exchange Commission (SEC) indicate that Takeda started its acquisition bid at $20 per share. Ariad attempted to interest other bidders, but was unable to find other buyers. Eventually Ariad was able to talk Takeda to a $24 per share offer, which was a 74 percent premium.
Ariad was under some controversy during the last year. U.S. Sen. Bernie Sanders specifically cited Ariad regarding price increases for its leukemia drug, Iclusig, during the presidential election. Since its launch in 2012, the price for Iclusig rose 73 percent. Sanders said the price increase went from a monthly price of $9,580 in 2012 to $16,560 per month—a total price of $198,720 per patient annually.
In the deal, Takeda picked up Iclusig, as well as a late-stage drug brigatinib, which many project will be a blockbuster. Brigatinib is being developed for patients with anaplastic lymphoma kinase positive (ALK+) non-small cell lung cancer (NSCLC) whose disease is resistant to crizotinib.
John Carroll, writing for Endpoints News earlier this month, said, “Weber (Takeda’s chief executive) has a ways to go before proving he made the right decision, but he’s moving fast to overhaul the aging Takeda into a fleet-footed global player in biopharma. Sometimes, he’s racing against himself.”
Although not yet announced, Iclusig is expected to have generated sale of $170 to $180 million in 2016. Takeda’s best-selling blood cancer drug, Velcade, will be facing generic competition this year. Other key products will be losing patent protection starting in 2020.
Ariad employs more than 200 people in Cambridge, and the buyout has driven speculation some of them will lose their jobs. Harvey Berger, Ariad’s former chief executive officer, told the Boston Business Journal he thinks layoffs are likely. Berger, who started Ariad in 1991, left the company in 2015.
A recent federal filing by Aria this week included “frequently asked questions” the company had sent its employees on Monday. The Boston Business Journal noted that Ariad “did not provide substantive answers to questions regarding whether there will be downsizing, how it plans to integrate with Takeda, or what will happen to Ariad’s offices.”
“Integration planning is just getting started, so it is too soon to have details on what this means for individual Ariad employees,” the company said in a statement to the Boston Business Journal. “We want to minimize any uncertainty that this announcement may cause employees and are committed to providing any updates we may receive as the integration planning progresses. For now, it’s business as usual.”
The only particularly concrete information was the company’s response to the question, “Will any employees terminated following closing be entitled to severance benefits?” As the Boston Business Journal writes, “The short answer is yes.”
Takeda itself employs more than 2,000 people in Massachusetts. In 2008, Takeda acquired Cambridge-based Millennium Pharmaceuticals for about $9 billion.