Takeda Eyes Additional Divestitures to Pare Down Shire Deal Debt

Takeda logo on side of building

At the beginning of 2019, Takeda Pharmaceutical announced plans to sell about $10 billion worth of assets to offset some of the debt the company garnered in its $62 billion acquisition of Shire. In May, the company sold off assets worth $5.7 billion and now, the company is looking to sell more.

This morning, the New York Times reported that the Japanese pharma giant is eying another round of divestitures that could fetch the company about $1.68 billion. The company is offering up over-the-counter medications, as well as older prescription drugs that have lost patent protection or are close to losing it, according to the report. The company reportedly sent out information packages to potential buyers, including smaller pharma companies and private equity firms, the Times said, citing unnamed sources. While the sources did not name the companies or groups the packets were sent to, they did tell the Times that the over-the-counter drugs are expected to draw interest from the likes of Germany's Stada, France's Zentiva and Italy's Recordati. The assets up for sale were not identified, however, the Times said they have combined annual earnings of about €160 million, about $180 million.

According to the sources, Takeda is working with JP Morgan to drive the sale of the assets. However, neither Takeda nor JP Morgan chose to comment on the rumors, the Times said.

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In addition to the assets that could be divested in Europe, Takeda is also looking to unload about $1 billion worth of assets it has in the Latin American markets, the sources told the Times.

The acquisition of Shire placed about $30 billion of debt on the back of Takeda. The company has been looking to pare down that debt as it adjusts to the new size and scope of its portfolio from the Shire deal. At the beginning of this month, Takeda said it completed the May sale of Xiidra (lifitegrast ophthalmic solution) 5% product to Novartis. That deal was for $3.4 billion up front in cash and up to an additional $1.9 billion in potential milestone payments.

The acquisition of Shire gave Takeda a significant focus on rare diseases, as well as a much larger footprint in the U.S. drug market. With its new assets, Takeda will focus on its key business areas – Gastroenterology, Rare Diseases, Plasma-Derived Therapies, Oncology and Neuroscience. This focus enables Takeda to continue to deliver highly-innovative medicines and transformative care to patients around the world, creating long-term value for Takeda shareholders, the company said at the time of the deal.

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