Shire said today it has completed its $32 billion merger with Baxalta, creating what it called the global market leader in rare diseases and other specialized disorders.
Shire projected that the combined company would generate approximately 65% of its total annual revenues from its rare disease products—revenues the company has forecast as rising to more than $20 billion by 2020, with double-digit compound annual top-line growth.
The combined company would consist of more than 22,000 employees across more than 100 countries, as well as more than 50 programs in clinical development, balanced across early-, mid-, and late-stage projects.
Shire brings to the combined company products in gastrointestinal/endocrine diseases, hereditary angioedema (HAE), neuroscience, and lysosomal storage diseases. Baxalta—which is now an indirect wholly-owned subsidiary of Shire—is contributing products in its specialty areas of hematology, immunology, and oncology.
“Upon the completion of our combination with Baxalta, Shire is now the global leader in rare diseases, with the number one rare diseases platform based on both revenue and pipeline programs,” Shire CEO Flemming Ornskov, M.D., M.P.H., declared in a statement.
The Shire–Baxalta merger completion comes a week after shareholders of both companies voted to approve the deal. Shire and Baxalta announced their plans to merge in January, with Shire saying it expected to carry out more than $500 million in cost-cutting or “synergies” within the first 3 years after the deal closes.
Shire has said the synergies will be achieved by increasing efficiency, scaling up of the combined business, aligning Baxalta programs to Shire’s lean operating model, and optimizing the combined R&D portfolio.
However, Dr. Ornskov told The Boston Globe in a report published today that Shire is seeking to expand at least one of the combined company’s facilities—the R&D site opened by Baxalta last December at Kendall Square in Cambridge, MA, by adding 100 to 200 employees to the site’s workforce of more than 400.
Baxalta shareholders will receive a combination of $18 in cash and 0.1482 Shire ADS's for each Baxalta share—or 0.4446 of a Shire ordinary share if the Baxalta shareholder validly elected to receive ordinary shares.
Baxalta is the former Baxter BioScience global biopharmaceutical business spun off in July of 2015 by Baxter International, with a focus on developing new treatments for people with orphan diseases and underserved conditions in three areas of therapeutic focus. Baxalta is expected to be redomiciled in Dublin, where Shire is based—and where corporate taxes are much lower than in the U.S. Baxalta had been headquartered in Deerfield, IL, the headquarters city of Baxter.
As a result of the merger, the appointments of Baxalta board members Gail D. Fosler and Albert P.L. Stroucken to Shire’s board as nonexecutive directors have taken effect, Shire said.
“As we launch our combined company today, we have a talented and experienced extended leadership team in place to guide the organization in achieving our goals,” Dr. Ornskov added. “Working together, the possibilities are tremendous for our patients, healthcare partners, and, importantly, our people, with opportunity for additional value creation for our shareholders.”