Shares in Ireland-based biotech Shire have zoomed up two per cent this morning after it revealed it will sell its oncology business to France's Servier for $2.4bn (£1.7bn) as it seeks to become a leader in rare disease treatment. It said last month that any deal would strengthen its core therapeutic areas of developing medicines for cancer, gastroenterology and neuroscience.
Takeda said in March it was considering a bid for Shire and identified its oncology business as one of the main reasons for its interest.
A Takeda spokesman declined to comment.
Britain has strict rules about the conduct of bids, including defensive actions taken by target companies. Launched in 19 countries, Lonsurf generated €62 million ($76.8 million) in revenue during 2016-2017, according to a Servier announcement that did not furnish revenues for Pixuvri.
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At the end of last week, a report from Reuters citing two sources with direct knowledge of the matter claimed Takeda has even gone so far as sounding out potential lenders to help fund the deal. While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy.
Ornskov said the board will consider returning the proceeds of the sale back to shareholders through a buyback programme.
Shire has always been seen as a likely takeover target and was almost bought by USA drugmaker AbbVie (LSE: 0QCV.L - news) in 2014, until US tax rule changes caused it to walk away.
Its oncology business had sales of $262 million previous year, putting the divestment on a respectable revenue multiple of 9.2 times. Those and all other early-stage immuno-oncology pipeline collaborations will now go to Servier.
Servier believes that the acquisition will help the firm to establish direct commercial presence in the United States, in addition to expanding its oncology pipeline and portfolio of in-market drugs.