Deal or No Deal? The European Commission Signs off on Takeda’s Takeover of Shire

The European Commission (EC) has signed off on Takeda Pharmaceutical’s acquisition of Shire plc.

After announcing a potential snag with the European Commission last month, Takeda said this morning that it received clearance from the governmental body for its $62 billion acquisition of Shire. As initially expected, the Commission’s clearance is conditional on addressing overlaps in the companies’ inflammatory bowel disease businesses. Specifically, Takeda said this morning, there was concern over its marketed product Entyvio (vedolizumab), a gut-selective biologic, and Shire’s pipeline compound SHP647. Takeda said the companies have committed to divesting SHP647, as well as certain associated rights. However, that divestment is not a condition to the acquisition moving forward, Takeda said.

Takeda said Shire’s SHP647 is an “exciting compound” that it expects will draw interest from a number of different buyers. Takeda said it remains committed to Entyvio, which has been approved for use in more than 60 countries and is the cornerstone drug of its gastrointestinal pipeline.

Shire’s SHP647 is a fully human IgG2 monoclonal antibody. The drug candidate targets the mucosal vascular addressing cell adhesion molecule-1 (MAdCAM-1), which is involved in leukocyte trafficking in the GI tract. Additionally, SHP647 is believed to benefit patients by targeting excessive lymphocyte infiltration in chronic GI inflammation. Earlier this year, the U.S. Food and Drug Administration (FDA) granted Orphan Drug status to SHP647 for pediatric patients with moderately to severely active Crohn’s disease.

Takeda Chief Executive Officer Christophe Weber said he was pleased that the European Commission granted clearance to the acquisition.

“We are another step closer to creating a global, values-based, R&D-driven biopharmaceutical leader, and after several months of constructive dialogue, we are optimistic that our shareholders recognize the significant long-term value creation potential of this powerful combination,” Weber said in a statement.

With the European Commission’s clearance, Takeda has now received authorization to move ahead with the acquisition from the EC, the United States Federal Trade Commission, the Japan Fair Trade Commission, the State Administration for Market Regulation in China and the Brazilian Administrative Council for Economic Defense.

The seal of approval from the European Commission comes a few weeks ahead of a planned shareholder meeting to vote on the acquisition. Earlier this month, Takeda announced that shareholders will vote on Dec. 5 in order to close out the deal by Jan. 8, 2019. In order to finalize the acquisition, Takeda will need to secure two-thirds support from shareholders. When the two companies came to an agreement earlier this spring, the price for Shire was set at $62 billion. However, that did not factor in the debt the company owes. When that amount is included in the deal, the price for Shire is closer to $80 billion. As BioSpace has previously reported, Weber has plans to address the debt, which could include the sale of some Shire assets, such as its eye-care business, which includes Xiidra, a treatment for dry eye disease.