Takeda to buy Ariad under $5.2-billion deal, boosting oncology portfolio

Takeda agreed to acquire Ariad Pharmaceuticals for $24 per share in cash, or an enterprise value of approximately $5.2 billion, boosting its oncology portfolio, the companies announced Monday. The transaction, which represents a premium of about 75 percent to Ariad's closing share price on January 6, has been approved by the boards of directors of both companies and is expected to close by the end of February.

Through the acquisition, Takeda will gain Iclusig (ponatinib), which is approved for the treatment of certain patients with chronic myeloid leukaemia and acute lymphoblastic leukaemia, and the experimental drug brigatinib. Takeda noted that Ariad's guidance for 2016 forecast revenue for Iclusig of between $170 million and $180 million, with peak sales of brigatinib estimated to exceed $1 billion, once approved.

Takeda CEO Christophe Weber remarked "we will broaden our haematology portfolio and transform our global solid tumour franchise through the addition of two innovative targeted therapies." Weber added that "opportunities to acquire such high-quality, complementary targeted therapies do not come often."

The FDA, which last year awarded brigatinib orphan drug status for the treatment of certain patients with non-small-cell lung cancer, accepted the drug for review in October. Takeda expects the ALK inhibitor will be approved in the US in the first half of this year, with global filings to follow.

The Japanese drugmaker indicated that the acquisition "will provide immediate revenue, bring considerable long-term revenue potential and deliver synergy savings." The company added that the deal is expected to be neutral to earnings in the 2017 fiscal year and accretive to earnings in the following year.

The acquisition comes after Ariad has faced criticism regarding the price of Iclusig. In October last year, US Senator Bernie Sanders chastised the drugmaker for price increases on the therapy, while Sanders and US Representative Elijah Cummings later asked the company to provide documentation justifying the price hikes. For related analysis, see ViewPoints: What's the cost of political scrutiny these days? One analyst puts a figure on it.

Last year, Takeda reportedly entered into negotiations to purchase Valeant Pharmaceutical's Salix Pharmaceuticals unit for about $10 billion. However, sources suggested that the talks eventually broke down due to disagreements over price.

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