With Takeda still eyeing a buy, Shire casts off oncology drugs for $2.4B

shire
Shire says its oncology cast-off will help sharpen its focus on rare disease. (Shire)

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.

On Monday, Shire announced it had agreed to hand its oncology business to France’s Servier for $2.4 billion, a move it said would sharpen its focus on rare diseases. And more streamlining deals are likely on the way.

“While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire’s longer-term strategy,” CEO Flemming Ornskov said in a statement, adding that “we will continue to evaluate our portfolio for opportunities to unlock further value ... with selective disposals of nonstrategic assets.”

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Meanwhile, Servier will land an “immediate presence” in the U.S. with products such as Oncaspar, which Shire nabbed in its Baxalta buyout. Baxter had bought the med to diversify its pharmaceutical portfolio before spinning it off into Baxalta, which Shire later picked up after a monthslong pursuit.

RELATED: Shire hints at ADHD spinoff, but could someone step in and buy the neuro franchise?

While the market has been watching for a divestment from struggling Shire, it’s the company’s ADHD business that’s been in the spotlight. Last August, the company said it was weighing a sale or spinoff of its neuroscience franchise, and it updated investors this January with news that it would hang onto the unit but house it in its own operating division.

RELATED: With big debt on tap, analysts see Takeda-Shire deal as 'more likely than not'

The oncology move makes things interesting for Japanese drugmaker Takeda, which late last month made its buyout interest in Shire public.

“The deal should ... boost Shire's negotiating position on asking price in the current offer period with Takeda, in our view,” Jefferies analyst Peter Welford wrote in a note to clients.