EC divestment to draw bidders on likelihood of efficacy and label expansion – analysis

13 November 2018 - 12:00 am UTC

Shire [LON:SHP] and Takeda’s [TYO: 4502] proposed divestiture package to gain European Commission (EC) merger approval is unlikely to face hurdles in finding a buyer, two industry experts and two lawyers said.
Among the reasons that bidders could find Shire’s Phase 3 SHP647 drug for inflammatory bowel disease (IBD) attractive are its clean safety profile and the strong indication of efficacy in Phase 2 data for ulcerative colitis (UC), one of the experts said, as well as the potential for label expansion, both experts said. A wide bidder pool could expedite the deal’s EC approval.
In sectors where there are few potential buyers, the EC could ask the parties to name an upfront buyer. In an upfront buyer remedy parties cannot close a deal before the EC approves the buyer, whereas in a ‘standard’ remedy situation the parties can close the deal and submit the divestment buyer for EC approval at a later stage, although within a set timeframe. The parties are not expecting the EC to ask them to name an upfront buyer, it is understood. Pharma cases generally don’t have upfront buyers, a third-party source commented.
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