Shares in the UK-listed drugmaker Shire surged after Japan’s biggest pharmaceutical company, Takeda Pharmaceutical, said it was considering making a takeover approach.
Shire’s shares jumped as much as 33% to £38.79 on the news, and later traded 17% higher at £36, valuing the company at £32.8bn. Takeda’s market value is about £29bn, around the same as Shire’s at last night’s closing price.
Shire is best known for its ADHD drug Adderall but its focus in recent years has been on rare diseases. The company is based in Dublin for tax purposes but run from Boston. It has scaled back its presence in the UK and most of its operations are in the US.
The news comes three-and-a-half years after US firm AbbVie abandoned its agreed $54bn (£34bn) takeover of Shire, after a US clampdown on so-called tax inversions by US companies buying an overseas business to secure a lower tax rate.
Shire then turned acquiror and completed its $32bn purchase of US firm Baxalta last June. In November it reported a drop in sales of haemophilia drugs, which became its biggest source of revenue following the deal.
Takeda said it was “at a preliminary and exploratory stage” in considering a bid, and no approach had been made to the Shire board.
In accordance with City takeover rules, the Japanese drugmaker will have to announce a firm intention to make an offer by 5pm on 25 April or walk away.
Takeda said a deal would create a global biopharmaceutical leader and strengthen its presence in its core areas of oncology, gastrointestinal and neuroscience drugs, as well as boosting its position in specialised medicines by adding Shire’s rare disease portfolio. The acquisition would also help Takeda expand its presence in the US.
Shares in Shire have been weak in the past year after the company said profits would be held back by greater competition from generic drugs and lower royalties.
It plans to split its business in two, dividing the rare disease and hyperactivity medicines businesses to boost performance.
Shire was founded in 1986 in Basingstoke, Hampshire. The Baxalta acquisition, by far its largest deal, gave it three new areas – haematology, immunology and oncology – and more than tripled the number of its employees to 23,000.
There are more than 7,000 known rare diseases, including haemophilia, Hunter syndrome, and many forms of rare cancer, and an estimated 350 million people worldwide are living with one.
Takeda dates back to 1781 when Chobei Takeda I began selling traditional Japanese and Chinese herbal medicines in Osaka. It employs 30,000 people in more than 70 countries.