Japan's Takeda to buy U.S. cancer drug maker Ariad in $5.2 billion deal

Mon Jan 9, 2017 10:26am EST
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By Natalie Grover

(Reuters) - Japan's Takeda Pharmaceutical Co Ltd (4502.T: Quote) said it would buy cancer drug maker Ariad Pharmaceuticals Inc ARIA.O in a deal valued at $5.20 billion, to beef up its oncology pipeline.

Takeda — which in September revealed it was scouting for multi-billion dollar acquisitions to reduce its dependence on domestic sales — agreed to pay $24 for each Ariad share, a premium of about 75 percent to its Friday close. reut.rs/2chTguK

Ariad stock was up 73 percent at $23.77 in morning trading on Monday. In 2016, its shares had nearly doubled.

Takeda's top-selling blood cancer drug Velcade is expected to face generic competition this year and other key products go off patent from 2020.

Cancer drugs are appealing to large drugmakers, with high prices being paid for promising assets. San Francisco-based Medivation was bought by Pfizer Inc (PFE.N: Quote) for $14 billion in August.

Given the scarcity of commercial-stage oncology assets and significant potential synergies, other Ariad bidders could emerge, SunTrust Robinson analysts said.

In November, Reuters reported that Takeda's negotiations to acquire Valeant Pharmaceuticals International Inc's (VRX.TO: Quote) Salix stomach-drug business had stalled, citing sources. reut.rs/2jkIbd9

With the Ariad deal, the Japanese drug giant gains access to the leukemia drug, Iclusig, which is expected to generate sales of $170 million-$180 million in 2016.   Continued...

Logos of Japanese Takeda Pharmaceutical Co are seen at an office building in Glattbrugg near Zurich March 7, 2012.   REUTERS/Arnd Wiegmann/File Photo