Takeda tags another Shire drug for sale to win key nod for $62B deal

Takeda's top priority these days is securing its gigantic Shire buyout, even if it means giving up pieces of its portfolio to do it.

To win European Commission approval for the deal, Takeda has proposed selling Shire’s inflammatory bowel disease candidate SHP647, which carries an orphan drug status and is in the midst of pivotal trials. If approved, the drug could be chasing the same patients as Takeda's already approved Entyvio.

That “future potential overlap” put SHP647 on the Japanese pharma's list of potential selloffs, the company announcedSaturday. Meanwhile, Takeda might also sell some European over-the-counter assets to help offset the massive debt it's taking on to make the deal, The Japan Times reported.

Putting SHP647 on the block would make three prescription drugs Takeda is willing to sacrifice to make the Shire deal work. It is reportedly looking to sell a couple of marketed drugs—Shire's Xiidra and Natpara—as well.

But Entyvio, which Takeda called “the cornerstone of” its gastrointestinal portfolio, is there to stay. In fact, the drug has been Takeda’s new favorite as multiple myeloma blockbuster Velcade faces competition in the U.S.

For the fiscal year that ended in March, Entyvio’s sales rocketed 40.6% to reach $1.84 billion. And Takeda is optimistic that 30%-plus growth will continue this year as it rolls out the drug in more territories and indications.

Shire’s robust pipeline is one key reason why analysts have been rooting for the buyout. But SHP647, a phase 3 medicine Shire licensed from Pfizer in 2016, seems dispensable, especially if a key antitrust nod is at stake.

The monoclonal antibody targeting MAdCAM-1—which plays a key part in chronic GI inflammation—has cleared phase 2 in both ulcerative colitis and Crohn’s, and it won an FDA orphan drug designation in pediatric UC last November. But according to GlobalData projections released in late July, the candidate is expected to collect less than $100 million in 2023. That ranks SHP647 in 12th place among Shire’s pipeline assets.

Takeda confirmed that SHP647 is the only drug—marketed or in development—at question in its discussions with the EC and said the talks won’t delay its timetable for completing the transaction.

Major regulators in the U.S., China, Brazil—and just last week, Japan—have signed off on the deal, but antitrust reviews are only one series of hurdles Takeda has to clear to get the deal done.

To help finance the $62 billion buyout, Takeda took on $31 billion in additional debt in May, and it's reportedly looking to gin up $5 billion by selling Xiidra, an eye drop, and Natpara, a hypoparathyroidism treatment. Now, it may put some European OTC assets potentially worth €1 billion ($1.1 billion) on the chopping board, The Japan Times reported, citing anonymous people familiar with the matter, although no final decisions have been made.

Besides, the company has put a for-sale sign on its legacy Osaka headquarters, which could yield $542 million, according to Nikkei Asian Review. And the Shire buyout plan also includes a cost-saving push designed to save $1.4 billion over three years and slash about 7% of the combined workforce.

Oct 29, 2018


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