Earlier this week, Baxalta CEO Ludwig Hantson called Shire's $30 billion bid for his company a "lowball" offer, urging shareholders instead to look to Baxalta's standalone growth prospects. But before Shire raises its proposal, it needs some more details on just what those are.
|Baxalta CEO Ludwig Hantson|
With its second-quarter earnings, Baxalta ($BXLT) raised its revenue forecast on hemophilia growth, new product launches and strong international demand, predicting 7% growth for the year. Shire, though, needs more information on the rosier outlook if it's going to put more money on the table, Bloomberg's sources say. And it's willing to wait for it, spending as long as several months to get the deal done.
Hantson has been touting the company's solo strategy since its Irish pursuer took its offer public early this month, highlighting Baxalta's youth--Shire made its bid privately just 9 days after the drugmaker spun off from parent Baxter--and its avenues for growth. The company is aiming to launch 20 new products by 2020, which it thinks will help it land more than $2.5 billion in risk-adjusted sales, its skipper said on a Monday conference call.
Shire's ($SHPG) $30 billion proposal, though, values Baxalta at just 5 times 2015 sales--below the median 7.2 times valuation other deals in the space have drawn over the last decade, Bloomberg Industries analyst Asthika Goonewardene wrote in a note seen by the news service.
"Hostile bids typically come with a premium to entice shareholders, so Shire's offer suggests it may concede that Baxalta is a lower-quality asset," Goonewardene wrote.
For investors, the Dublin drugmaker has painted the picture of a rare-disease powerhouse that leads the globe in "one of the most attractive and fastest growing segments in healthcare," as CEO Flemming Ornskov calls it. The way he sees it, Baxalta's "lack of engagement has been surprising," he recently wrote in a letter to Hantson.
But that doesn't mean the deal-minded company--which has a mind to join drugmakers like Gilead ($GILD), Biogen ($BIIB) and Celgene ($CELG) in the ranks of Big Biotech--won't be pursuing other tie-ups. As it works to bolster its rare-disease focus, it could strike multiple smaller deals, or one or more big transactions, Bloomberg reports.
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