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DUBLIN, Ireland, and BANNOCKBURN, Ill. — Shire plc plans to buy Baxalta Inc., a biopharmaceutical company focused on orphan diseases and underserved conditions, in a cash and stock deal valued at $32 billion.
Under the agreement, Baxalta shareholders will receive $18 in cash and 0.1482 Shire American depositary shares per Baxalta share, for a combined of $45.57 per Baxalta share based on Shire’s closing ADS price on Jan. 8.
The companies said Monday that their merger will create the No. 1 rare diseases platform in revenue and pipeline depth, with best-in-class products in multibillion-dollar franchises including hematology, immunology, neuroscience, lysosomal storage diseases, gastrointestinal/endocrine and hereditary angioedema.
In addition, Shire and Baxalta said the combined company will have a growing franchise in oncology, with approved products and innovative compounds in development, as well as a robust late-stage ophthalmics pipeline.
The Shire-Baxalta portfolio will have an expanded range of therapeutic areas with more than 60 programs in development, including over 50 that will address rare diseases and the newly approved Baxalta products Adynovate, Vonvendi and Obizur.
Shire said it expects more than 30 recent and planned product launches from the combined pipeline, contributing about $5 billion in annual sales by 2020.
“This proposed combination allows us to realize our vision of building the leading biotechnology company focused on rare diseases. Together, we will have leadership positions in multiple, high-value franchises and become the clear partner of choice in rare diseases,” Shire chief executive officer Flemming Ornskov said in a statement. “Our expanded portfolio and presence in more than 100 countries will drive our growth to over $20 billion in anticipated annual revenues by 2020. Our due diligence has reinforced our belief in the combination, and we look forward to welcoming Baxalta colleagues to a shared entrepreneurial, patient-driven culture.”
On Aug. 4, Baxalta announced that it rejected an unsolicited, all-stock acquisition bid valued at $30 billion from Shire, calling the offer undervalued. Baxalta noted that it received the same proposal privately on July 10.
With the new agreement, the value of Shire’s offer represents a premium of about 37.5% to Baxalta’s unaffected share price on Aug. 3,the day before the public announcement of Shire’s initial offer for Baxalta. That will provide Baxalta shareholders with approximately 34% ownership in the combined company.
“Today’s announcement marks a new path forward for our organization and is a testament to the significant progress we have made in achieving our strategic business priorities. This transaction presents a unique opportunity for Baxalta shareholders, who will receive substantial immediate value as well as an ongoing stake in a combined global leader in rare diseases with strong growth prospects,” Baxalta CEO Ludwig Hantson stated. “We bring to Shire a strong portfolio and pipeline of market-leading products, high-quality manufacturing capabilities and a talented global workforce that places patients at the center of everything we do. The combined organization will be well-positioned to accelerate innovation and deliver enhanced value for all stakeholders.”
Bannockburn, Ill.-based Baxalta launched as an independent company in July upon being spun off by Baxter International.
Shire and Baxalta expect the transaction to close mid-2016, pending shareholder and regulatory approvals and other customary closing conditions.
