Japan’s Takeda Buys Ariad for $5.2 Billion

January 9, 2017, 4:16 PM UTC
An Ariad Pharmaceuticals chemist working in the company’s lab.
Photo by Barry Chin—The Boston Globe/Getty Images

Japan’s Takeda Pharmaceutical said on Monday it would buy cancer drug maker Ariad Pharmaceuticals in a deal valued at $5.20 billion, to beef up its oncology pipeline.

Ariad stock was up 74.7% at $23.98 in premarket trading.

Takeda has agreed to pay $24 in cash for each Ariad share, a premium of about 75% to its Friday close.

Ariad’s leukemia drug, Iclusig, which is expected to generate sales of $170 million-$180 million in 2016, came under fire in October for “staggering” price increases.

A U.S. Food and Drug Administration decision on its lung cancer treatment brigatinib, which is being touted as a potential blockbuster, is expected by April 29.


Cancer treatment is a target for many large drugmakers, with high prices being paid for promising assets, such as Medivation, which was bought by Pfizer Inc for $14 billion.

Takeda’s negotiations to acquire Valeant Pharmaceuticals International’s Salix stomach-drug business have stalled over price disagreements, Reuters reported in November, citing people familiar with the matter.

The Ariad deal, which Takeda plans to fund by taking on $4 billion in new debt as well as existing cash, is expected to close by the end of February.

Ariad had long-term debt of about $522 million as of Sept. 30, according to a regulatory filing.

The equity value of the deal, which is expected to add to Takeda earnings in 2018, is $4.66 billion, according to Reuters calculations.

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