Shire PLC will press its takeover bid for Baxalta Inc., despite a chilly reception from the target and uncertainty caused by the furor over drug prices, Shire’s chief executive said in an interview.
Flemming Ornskov, who oversees the Dublin-based company from its campus in Lexington, would not say whether he is prepared to sweeten the unsolicited $30 billion offer or if he has been in contact with Baxalta’s executives. In August, Baxalta’s chief executive, Ludwig N. Hantson, dismissed the bid as “wholly inadequate.”
But Ornskov made it clear he continues to keep his eye on Baxalta and its new research center in the heart of the biotech cluster in Cambridge’s Kendall Square.
“I’m hoping they’ll let me in for a tour of that building . . . ” Ornskov joked. “At least I can drive by their building in downtown Cambridge.”
Representatives of Baxalta, the former biopharma division of the health care giant Baxter International Inc., declined to comment.
Increased scrutiny of specialty drug prices and fears that the sector might be overvalued has led to a retreat in stock prices over the past few months. Shire’s shares are down 21 percent from their late July peak of $270.63, closing Friday at $213.55.
Ornskov would not address speculation that Shire’s lower market value could make it vulnerable to a takeover from a larger pharma company such as Pfizer Inc. or Allergan PLC, even as it pursues Deerfield, Ill.-based Baxalta.
“I don’t think you have to be overly obsessed by the ups and downs in the market value of the sector,” Ornskov said. “I don’t focus on whether someone wants to buy us. If someone wants to buy us, that’s a sign of attraction.”
Shire might wait until early next year to boost its bid for Baxalta, pharmaceuticals analyst Jason Gerberry at the Boston health care investment bank Leerink Partners suggested in a note to investors Friday, after Shire posted third-quarter earnings that beat Wall Street’s expectations. The results lifted Shire’s shares 4.5 percent for the day.
Gerberry said that Shire’s next move might come after it reports results from a late-stage clinical study of lifitegrast, its experimental treatment for dry-eye disease. If the data are positive, that could drive up Shire’s stock and better position the company financially to mount an aggressive bid for Baxalta. US regulators delayed their decision on lifitegrast earlier this month, asking for more information.
“The good news is, with our additional study, we’ll be able to proceed in the first quarter of next year,” Ornskov said.
If the data prove strong enough, Shire can resubmit its application for approval of lifitegrast, and the Food and Drug Administration would render a decision in six months rather than in the standard 10 months.
“Our preparations for a launch [of lifitegrast] continue uninterrupted,” he said.
Ornskov said that Shire continues to expand in Massachusetts, where it has added 711 employees this year and now has more than 2,300 in Lexington.
About 85 percent of the new employees were hired locally, while the rest relocated here from a Shire site outside Philadelphia that was closed.
He said the company has invested $718 million in capital projects here since 2005 and now has 1.13 million square feet of office and laboratory space.
Despite that, Ornskov said, “space is increasingly an issue for us.” He said that Shire will move some office employees into a former Vistaprint building it is leasing across from its campus.