|Baxalta CEO Ludwig Hantson|
On Tuesday, Shire ($SHPG) went public with a $30 billion bid for Baxalta ($BXLT) that had already been rejected once. And the second time around, Baxalta had the same answer: It's not happening.
Shire's $45.23-per-share bid "significantly undervalues" the young company, Baxalta said late Tuesday, especially since it's just that--young.
"As a new, publicly-traded entity only since July 1, we are just in the initial stages of implementing our growth strategy as a standalone company and our stock has not yet achieved a price level that appropriately reflects the company's value and prospects," Baxalta CEO Ludwig Hantson wrote in a letter to Shire chief Flemming Ornskov.
Diving into a merger just a month after spinning off from parent company Baxter International ($BAX) "would be severely disruptive," Baxalta Chairman Wayne Hockmeyer added in a statement.
But its youth isn't the only reason the Illinois pharma sees a Shire buyout as a no-go. Unlike the Irish pharma--which touted a deal's prospects for creating a "global" leader in rare diseases--Baxalta doesn't view a tie-up between the two as complementary--nor does it think either company's portfolio would benefit.
Most importantly--as far as shareholders are concerned--"we do not think the combination would generate substantial operational or revenue synergies, which would be critical to any potential value creation," Hantson wrote.
Baxalta's confidence in its standalone strategy comes despite a reliance on its hemophilia drugs--which, ever since Biogen ($BIIB) rolled out a pair of long-acting contenders last year, have been facing stepped-up competition. The rivals are only set to multiply, with Bayer and Novo Nordisk ($NVO) also working on next-gen meds, though Baxalta has its own coming up the pipeline, too--and so far, Biogen's haven't triggered the volume of patient-switching that some analysts predicted.
Meanwhile, the ball is now in Shire's court, and the Dublin drugmaker knows a thing or two about dealmaking back-and-forth. Last year, it rejected multiple advances from AbbVie ($ABBV) before settling on a $55 billion transaction--only to see that agreement scuttled when the U.S. imposed new, stricter rules on tax inversions.
- read Baxalta's release
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