Can Baxalta hold off Shire with its own bid for Ariad?

Baxalta CEO Ludwig Hantson

Baxalta may not want to be snatched up at its young age, as it told Irish suitor Shire ($SHPG) early this month. But that doesn't mean it doesn't want to land some deals itself--and Ariad Pharmaceuticals may be on its radar.

The Illinois pharma, recently spun off by Baxter ($BAX), is reportedly in talks to buy Ariad ($ARIA), Bloomberg sources say. But there's no certainty the two will come to an agreement, and Baxalta ($BXLT) could also go after other targets. On Friday, Cambridge, MA-based Ariad had a market cap of $1.5 billion, but that had swelled to about $1.7 billion at press time on the deal speculation.

Buying up Ariad, the maker of once-suspended leukemia treatment Iclusig, would beef up Baxalta's offerings in oncology--an area it's trying to expand alongside its flagship hematology work. In May, parent company Baxter agreed to purchase leukemia treatment Oncaspar from Italy's Sigma-Tau Finanziaria for $900 million to bolster Baxalta ahead of the biopharma unit's spinoff.

An Ariad buy could also throw a wrench in Shire's plans. The Irish drugmaker went public with its $30 billion bid to buy Baxalta a few weeks back, and it's sticking to the offer despite a cool response. Baxalta has firmly rejected the bid, with CEO Ludwig Hantson insisting it was both too low and a poor fit.

"In some respects, the nature of Shire's interest in Baxalta is puzzling. Is it trying to opportunistically acquire our attractive hemophilia, immunology and growing oncology platforms without true synergies?" Hantson said on a call with shareholders a week after dismissing the proposal. "We have an attractive set of franchises and it would be a shame to hand it over for a lowball valuation."

Meanwhile, orchestrating a buyout could be on the agenda for Ariad; in April, its outgoing chief exec said the company was open to "strategic alternatives." His exit was forced by Alex Denner, the protégé of notorious shareholder activist Carl Icahn, who launched a proxy brawl in February.

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