Dublin-based pharmaceutical group Shire PLC on Tuesday said it had bid US$30 billion for Baxalta Inc to form a global biotech company, an offer soundly rejected by the US firm.
The industry is going through a period of consolidation and last week Israeli pharmaceutical giant Teva Pharmaceutical Industries Ltd said it was buying the generic drug business of Allergan PLC for US$40.5 billion.
“We believe the proposed combination of Shire and Baxalta would be strategically and financially attractive for both of our companies, accelerating our respective growth ambitions and creating the leading global biotech company in rare diseases,” Shire chief executive Flemming Ornskov said in a statement.
Shire said it made the unsolicited offer to Baxalta on July 10 at US$45.23 per Baxalta share, up 36 percent over Baxalta’s price on Monday.
Shire said a tie-up would generate US$20 billion in product sales by 2020. Shire and Baxalta each had revenues of about US$6 billion last year.
Ornskov said it was Shire’s “strong preference to immediately enter into a negotiated transaction to explore the full potential of the proposed combination and finalize the terms of an agreement.”
REJECTION
However, Baxalta on Tuesday said that it had rejected the Shire bid because it “significantly undervalues” Baxalta and its potential.
“Our board strongly believes that Baxalta’s independent global infrastructure and world-class manufacturing operations will provide an excellent platform to grow value for our shareholders,” Baxalta chief executive Ludwig Hantson said in a letter to Ornskov. “We are just in the initial stages of implementing our growth strategy as a standalone company and our stock has not yet achieved a price level that appropriately reflects the company’s value and prospects. A transaction at the exchange ratio you proposed significantly understates Baxalta’s true value.”
Meanwhile, EU regulators on Tuesday approved Pfizer Inc’s US$15.23 billion purchase of injectable drug and infusion device maker Hospira Inc.
DRUG SALES
The European Commission said Pfizer agreed to sell the European rights to experimental biosimilar version of the immune disorder drug Remicade and a few other products, including some chemotherapy drugs, in certain markets.
Pfizer, the second-largest drug company in the world in terms of revenue, agreed to buy Hospira of Lake Forest, Illinois, in February.
The purchase would strengthen the New York company’s position in the growing market for biosimilars, which are cheaper versions of biologic drugs. Pfizer has said it expects to complete the acquisition before the end of this year.
Additional reporting by AP
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