Hey, Takeda shareholders: Shire's Q1 may ease some buyout worries, analysts say

Shire's hemophilia drugs had a good quarter, while dry eye product Xiidra struggled. (Shire)

On Thursday, Takeda investors got a closer look at the company they may snag a piece of if the Japanese drugmaker’s $64 billion bid for Shire goes through. And analysts see at least a couple of reasons they should be pleased.

The way Jefferies analyst Peter Welford sees it, Shire’s decision to separate out financials for its neuroscience unit “reveals a highly profitable division." The business—which also includes gastrointestinal brands Pentasa and Lialda that don’t fit into the rare-disease category—is simply more profitable than its rare-disease portfolio; it sent 82% of its sales to the bottom line, versus 48% for Shire’s rare disease unit.

Neuroscience and GI are two areas that likely attracted Takeda to Shire in the first place. They’re both focus areas for the wannabe acquirer, as is oncology—though Shire recently decided to sell off its own oncology assets to Servier for $2.4 billion.

Meanwhile, on the rare disease side, hemophilia and Shire’s hereditary angioedema franchise both looked “strong,” Bernstein analyst Ronny Gal said in an investor video. HAE in particular saw a “nice bounce back” as volume returned following a shortage of drug Cinryze, he noted.

RELATED: Shire and Takeda come to terms with a $64B deal, the biggest pharma M&A in years

That’s not to say all went well for the quarter, though. Notably, blockbuster hopeful Xiidra, a dry eye treatment, checked in well below $89 mllion estimates at $62 million. Immunoglobulin therapies and Elaprase also missed the mark thanks to U.S. destocking and large shipment timing, respectively.

Overall, revenues of $3.77 billion topped Wall Street forecasts by 1%, with earnings per share coming in 7% higher than expected at $3.86. Gal, for one, called the performance a "good start for the year."

RELATED: Takeda shares plummeted on Shire deal buzz. Is a buyout now out of reach?

Takeda’s investors haven’t been fans of the Shire buy idea since the company first made its interest known last month, though Shire’s—who may be tired of the bottom-feeding share prices that have been a staple since the company’s Baxalta buy—have celebrated the takeover interest.

“Takeda shareholders (and potentially the board) may prove resistant” to Takeda’s latest offer, which Shire’s board is considering, “given the stock decline,” Gal wrote earlier this week.

Still, he and other analysts expect the deal to ultimately go through.

“You have both committed buyer and an accepting seller. Short of Takeda stock price imploding a deal is likely,” Gal said.