August 31, 2015
By Mark Terry, BioSpace.com Breaking News Staff
An unidentified source reported Friday that Deerfield, Ill.-based Baxalta is in talks to acquire Cambridge, Mass.-based Ariad Pharmaceuticals, Inc. . The rumors drove Ariad’s stock price up 40 percent.
Baxalta, a recent spinoff of Baxter International , has been fending off an acquisition bid from Dublin-based Shire since early July. On July 10, 2015, Shire made an offer to acquire Baxalta for $45.23 per share, about 36 percent over the Aug. 3, 2015 Baxalta stock price.
When Baxalta did not respond, Shire took the offer public on Aug. 4, pressured Baxalta executives, board and investors into considering the deal. Baxalta appears to be continuing to fend off the offer, arguing that the Shire deal undervalues the company and that it is too soon after the spinoff from Baxter, that it would be too disruptive. The too disruptive argument may be a little weaker now, if, in fact, Baxalta is attempting to acquire Ariad, although part of the reasoning behind such a deal might be to further strengthen its ability to avoid the Shire acquisition.
On Aug. 24, Ariad announced that it was leasing almost half of its new headquarters on Binney Street in Cambridge, Mass. to IBM Corporation . Its recent second quarter earnings reported a net loss of $63.2 million. A sale of Ariad would include its oncology drug, Iclusig (ponatinib), which has been doing well recently. “During the second quarter, the Company continued strong commercial execution of Iclusig with double-digit percentage, quarter-over-quarter growth in both the U.S. and European markets,” said Harvey Berger, chairman and chief executive officer of Ariad in a statement. “We expect additional commercial launches and positive pricing and reimbursement decisions in several European countries during the remainder of the year.”
Shire’s interest in Baxalta is to strengthen its focus on rare diseases. Baxalta’s interest would likely be to strengthen its position in the oncology market. In addition to Inclusig, Ariad also has Brigatinib and AP32788 in its pipeline for non-small cell lunk cancer.
Speaking on Shire’s interest in Baxalta in an interview with Bloomberg earlier in August, Ludwig Hantson, chief executive officer of Baxalta said, “Is it trying to opportunistically acquire our attractive hemophilia, immunology and growing oncology platforms without true synergies? We have an attractive set of franchises and it would be a shame to hand it over for a low-ball valuation.”
This year is turning out to be an extremely active year of merger and acquisition activity in the life sciences market. “It’s a very active period,” said life sciences consultant Harry Glorikian in an interview with The Boston Globe. “It’s driven by the lower cost of capital and the need for companies to pick up new products for their [product] pipelines. Some of this is a combination of offensive and defensive moves. If you don’t want to be bought, you try to buy someone else. And there’s nothing that indicates that merger fever is going to die down any time soon.”
was in need of a boost. Shares traded on Oct. 13, 2014 for $5.02, rising fairly steadily to a high of $9.71 on April 24, 2015. Then it began to drop, hitting $7.56 on July 8 and $6.44 on Aug. 24. After Friday’s news, stock jumped and is currently trading at $9.89 per share.
