UPDATED: Rare Disease Drug Maker Shire’s Stock Spikes Amid Possible Bidding War Between Allergan and Takeda

April 19, 2018, 3:51 PM UTC
Shire Plc Chief Executive Officer Flemming Ornskov Interview
Flemming Ornskov, chief executive officer of Shire Plc, speaks during a Bloomberg Television interview in New York, U. S., on Friday, Jan. 15, 2016. Ornskov said he's confident shareholders will vote to approve Shire's $32 billion takeover bid for Baxalta Inc. Photographer: Chris Goodney/Bloomberg via Getty Images
Chris Goodney—Bloomberg via Getty Images

In what would make for a blockbuster acquisition, Japanese pharmaceutical giant Takeda is continuing its hunt for rare disease drug maker Shire. But Shire isn’t making things easy: The firm has already rebuffed Takeda’s advances on three separate occasions, including a recent cash-and-stock offer that would value the deal at $62.5 billion. And Reuters reports that another huge industry player, Botox maker Allergan, may try to scoop up Shire from under Takeda’s nose (see our update below). Shire stock (SHPG) was up 4% in early Thursday trading while Allergan (AGN) shares fell 5%.

Takeda confirmed the M&A rumors amid mounting speculation, stating Thursday that the company was “notified that the Board of Shire had rejected” its most recent buyout proposal. “Discussions between the parties regarding a potential offer are ongoing,” the company said. Allergan released a statement shortly thereafter confirming that “it is in the early stages of considering a possible offer for Shire” but has not yet made an official offer. (UPDATE: Allergan put out a second statement Thursday indicating that it may not be interested in buying Shire after all: “In order to comply with the requirements of the UK Takeover Code, Allergan announced that it does not intend to make an offer for Shire.”)

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Snatching up Shire, whose portfolio includes the best-selling ADHD drug Vyvanse, would be a transformative deal for either Takeda or Allergan. Takeda, Japan’s largest drug maker, has been on the hunt to expand its global footprint, particularly through acquisitions and partnerships. Allergan CEO Brent Saunders is notorious as a serial acquirer and bolt-on biotech M&A evangelist. But a deal to buy Shire would be a far bigger move for the company, which itself was slated to be bought by Pfizer in a mega-deal that was ultimately scuttled in 2016.

Shire raked in $15.2 billion in 2017 revenues. An acquisition of the company would be the biggest pharmaceutical deal of the year, which might hearten investors who lamented the laggard pace of M&A in the industry last year.

This post has been updated to reflect Allergan’s new statement indicating it may not pursue Shire after all.

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