November 25, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Inside sources have indicated that Dublin-based Shire is preparing another bid for Deerfield, Ill.-based Baxalta .
In July, Shire made a bid for Baxalta, and when that wasn’t accepted, Shire went public with the offer in early August in hopes of pressuring the Baxalta board and shareholders into considering the deal. Baxalta spun off from Baxter International on July 1, 2015.
The source indicates that Shire is working with Morgan Stanley, Evercore and Deutsche Bank on a deal that would be structured in cash and shares. Baxalta has a market cap of $22.7 billion and would complement Shire’s portfolio for rare or “orphan” diseases. If combined, the merged companies would have sales of about $20 billion by 2020 with a projected annual sales growth in the double digits.
Baxalta has argued against any merger, saying this soon after the spinoff it would be too disruptive, and that Shire’s offers to date undervalue the company.
Baxalta is currently trading up for $35.74 per share. Shares traded on Aug. 19 for $40.29, dropped to $30.83 on Oct. 13, and were trading for $33.53 on Nov. 23.
Shire traded on Aug. 3 for $268.08, dropped to $197.88 on Sept. 29, and popped up again to $231.08 on Oct. 28. Shares are currently trading for $208.07.
The unnamed source says that Shire’s chief executive officer, Flemming Ornskov, has “never given up.”
Earlier this month, Shire acquired Burlington, Mass.-based Dyax Corporation for about $5.9 billion. Dyax focuses on plasma kallikrein (pKal) inhibitors for the treatmenet of HAE. It currently has a product, Kalbitor, for the treatment of HAE in patients twelve-years-old and up. It also has DX02930 ready for Phase III studies.
Most recently, on Nov. 23, Baxalta announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) gave a positive opinion recommending marketing authorization for ONCASPAR as part of antineoplastic combination therapy in acute lymphoblastic leukemia (ALL) in pediatric patients and adult patients. It will then be referred to the European Commission (EC), which grants marketing authorization in the European Eunion.
In September, Baxalta announced it had filed a Registration Statement with the U.S. Securities and Exchange Commission (SEC) about a secondary offering of up to $1.45 billion of common stock. Baxalta has indicated plans to launch 20 drugs by 2020 that would have a projected combined sales in excess of $2.5 billion.
Shire’s Ornskov has indicated in talks that if a deal with Baxalta occurred, he would focus on cutting costs up to $1 billion, half of which would be related to overlapping research and development expenses.
Writing in a BidnessEtc article in September, Hannah Ishmael said, “It is believed that the cost-savings announcement is an attempt by Shire management to prepare shareholders for a sweetened Baxalta bid. A higher bid would mean a secondary offering, and hence, existing shareholders have to be accepting of a dilution.”
