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January 9, 2017

Takeda to Acquire Ariad Pharmaceuticals for $5.2B

  • Ariad Pharmaceuticals has agreed to be acquired by Takeda Pharmaceutical for approximately $5.2 billion, the companies said today, in a deal designed to expand the buyer’s oncology and hematology portfolios.

    Takeda said the acquisition would expand the company’s cancer holdings into solid tumors with two targeted therapies, the marketed drug Iclusig® (ponatinib) and the non-small-cell cancer (NSCLC) candidate brigatinib, which is now under FDA Priority Review with a PDUFA decision date of April 29.

    That decision is expected by Takeda to be an approval, with the company projecting brigatinib has potential to be a best-in-class anaplastic lymphoma kinase (ALK) inhibitor generating peak annual sales of more than $1 billion.

    Brigatinib (AP26113) is in development for ALK+ NSCLC in which disease is resistant to the marketed drug Xalkori® (crizotinib), which in the U.S. is co-promoted by Pfizer and EMD Serono, the U.S. and Canadian biopharma business of Merck KGaA.

    Iclusig is a kinase inhibitor indicated for chronic-phase, accelerated-phase, or blast-phase chronic myeloid leukemia (CML) or Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL) in which no other tyrosine kinase inhibitor therapy is indicated. Iclusig is also indicated for T315I-positive CML (chronic phase, accelerated phase, or blast phase) or T315I-positive Ph+ ALL.

    Iclusig is projected to have generated between $170 million and $180 million in revenue during 2016, Takeda said, citing guidance from Ariad.

    “Opportunities to acquire such high-quality, complementary targeted therapies do not come often, and we are very excited about the potential for this transaction to benefit patients, our shareholders, and other stakeholders,” Takeda president and CEO Christophe Weber said in a statement.

    Takeda said that it foresees “significant long-term revenue potential” from Iclusig and brigatinib.

    Added Ariad President and CEO Paris Panayiotopoulos: “We are very pleased to combine with Takeda, which will allow us to not only accelerate our mission to discover, develop, and deliver precision therapies to patients with rare cancers, but also deliver meaningful value to our shareholders through a substantial cash premium.”

    Panayiotopoulos left EMD Serono to take Ariad’s day-to-day helm last year, then quickly eliminated 90 jobs, 25% of the company’s workforce. He succeeded Harvey J. Berger, M.D., Ariad’s chairman and CEO, who founded the cancer drug developer in 1991 but retired in 2015, some 2 months after activist investor Alex Denner’s Sarissa Capital launched a proxy battle by nominating two candidates to Ariad’s board.

    Sarissa sought the “imminent retirement” of Dr. Berger, citing his retention as CEO in 2013, the year the company was forced to withdraw its leukemia treatment Iclusig from the U.S. market, leading to the layoff of 160 employees; Iclusig returned in 2014 with a boxed warning and a narrower patient indication.

    Takeda’s acquisition would take the form of an all-cash tender offer for all outstanding shares of Ariad common stock. At $24 per share, the deal would give Ariad shareholders a 75% premium over the company’s closing share price Friday of $13.40 per share. Takeda said its acquisition of Ariad would be funded by up to $4 billion of new debt, with the rest coming from existing cash.

    The deal, Takeda said, would immediately add to its underlying core earnings by the company’s 2018 fiscal year, which starts April 1 of this year, and would generate immediate and long-term revenue growth. That growth, Takeda said, as well as synergy savings will offset increased sales and marketing costs for the launch of brigatinib

    The transaction has been approved unanimously by the boards of both companies, and is expected to close by the end of February 2017, Ariad said, subject to required regulatory approvals and other customary closing conditions.

    Sarissa, which holds 6.6% of Ariad’s common shares, as well as each member of Ariad’s board of directors, have agreed to tender their shares to Takeda, the companies said.

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