Shire offloads oncology unit to Servier for $2.4bn

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"We are confident that Servier will continue to invest in this business and our colleagues who are expected to transfer as part of the transaction in order to meet the needs of cancer patients globally". He added that the company will review its portfolio for other assets to sell "to unlock further value and sharpen our focus on rare disease".

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.

"While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy", said CEO Flemming Ornskov, the key narrator in Shire's makeover story, in a statement. But Takeda laid out a case for a tie-up, saying in part that Shire would strengthen the Japanese company's core therapeutic areas of oncology, gastrointestinal disease, and neuroscience. And more streamlining deals are likely on the way.

In 2017, Shire's oncology unit made revenues of $262m, and the firm said gross assets included in the transaction are worth about $1.6bn with attributable profits of around $140m.

Under the deal, Servier will acquire oncology treatment Oncaspar (pegaspargase), as well as ex-US rights of Onivyde (irinotecan pegylated liposomal formulation). Takeda must now decide whether it will make a firm offer for Shire by 25 April. The company also holds rights to pancreatic cancer drug Onivyde everywhere in the world except the US and Taiwan.

Shire was at pains to point out that it started exploring the sale of oncology in December and commenced the disposal process in January, during which it identified multiple possible U.S., European and Japanese buyers.

Jefferies analysts said the sale "should boost Shire's negotiating position on asking price in the current offer period with Takeda".

The company declined to comment on how Shire's latest sale will affect that decision.

In announcing 2016-2017 results on February 22, Servier said it finished the year with 11 cancer candidates in clinical phases as well as two marketed drugs: Pixuvri (pixantrone), indicated for adults with multiply relapsed or refractory aggressive non-Hodgkin's B-cell lymphoma; and Lonsurf (trifluridine and tipiracil), indicated for metastatic colorectal cancer.

Frank Vinluan is editor of Xconomy Raleigh-Durham, based in Research Triangle Park.