How Badly Does Takeda Want Shire’s Ophthalmology Franchise?

How Badly Does Takeda Want Shire's Ophthalmology Franchise?

Shire plc’s decision last week to accept the $62 billion acquisition offer by Takeda Pharmaceutical Company Ltd. has fed speculation in the pharma trade press about the future of Shire’s ophthalmic franchise in the combined company.

Takeda’s Take

Takeda CEO Christophe Weber hardly mentioned ophthalmology in an analyst call after the acquisition agreement was announced. He said the combined company will be focusing on gastrointestinal, neuroscience, oncology, and rare disease, plus plasma-derived therapies and vaccines. He noted Shire has a late-stage development program that’s “very complementary to our pipeline.” The only mention of ophthalmology in the call was when Weber mentioned Xiidra in passing. A transcript of the call is available at Seeking Alpha.

Elissa Johnsen, Takeda’s head of global product and pipeline communications, tells OIS Weekly, “While it is too soon to give specifics on how each part of Shire’s portfolio will be evaluated and integrated into Takeda, Shire’s ophthalmology business is a strong business with a number of upcoming product launches that Takeda is excited about.”

The Trade Press’ Take

As Pharmaceutical Technology reported in April when Takeda first bid for Shire, the ophthalmology franchise consists solely of Xiidra, but with these promising programs in the pipeline:

  • SHP-640 in Phase III for infectious conjunctivitis;
  • mecasermin rinfabate in Phase II for retinopathy of prematurity;
  • JSM-6427 in Phase I for age-related macular degeneration;
  • SHP-630 in Phase I for retinitis pigmentosa; and
  • SHP-639 in Phase I for glaucoma.

Shire is also developing SHP-659, currently in Phase II trials, for dry eye disease.

Chemistry World states that Takeda may look to sell Shire’s general medicine and ophthalmology brands. And Kevin Grogan of Scrip Pharma Intelligence reports, “Takeda is clearly keen on Shire’s rare disease therapies, but the future of the ophthalmology business, and notably the dry eye drug Xiidra, is less certain.” Yahoo Finance quoted UBS as saying the Xiidra franchise was “weak.”

Bid Boosts Shire’s Stock

This doesn’t give tea leaf readers much to go on for now. The Takeda bid has pushed Shire’s stock to a six-month high of around $170 a share. Meanwhile, Takeda’s stock had been languishing at a 52-week low of around $20 a share after the bid, but ticked upward about 10% to around $22 a share after President Trump’s May 11 address on drug pricing. That’s still below what the stock was trading at even a week before Takeda announced the bid for Shire.

The transaction was approved by both companies’ boards of directors and is expected to close in the first half of 2019. Upon the closing of the transaction, Takeda shareholders will own approximately half of the combined group. To make the transaction happen, Takeda entered into a bridge credit agreement to borrow up to $30.85 billion. JP Morgan Chase Bank is administrative agent and an initial lender of the bridge credit agreement, with Sumitomo Mitsui Banking Corp., and MUFG Bank Ltd., also serving as initial lenders.

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