Takeover whispers about Shire growing much louder

A sign sits in front of Shire's manufacturing facility in Lexington.
A sign sits in front of Shire's manufacturing facility in Lexington.REUTERS/Brian Snyder/File

Shire PLC, the Irish drug maker that has most of its operations in Massachusetts, has for months been the subject of takeover rumors.

On Wednesday, the whispers grew considerably louder. Japan’s largest drug company, Takeda Pharmaceutical Co., said it is considering making a bid for the company — one that analysts predicted could approach $50 billion.

Takeda apparently is enticed by Shire’s stock price, which has fallen 45 percent in the past 15 months. It said in a statement that the potential offer “is at a preliminary and exploratory stage and no approach has been made” to Shire’s board.

“There can be no certainty that an approach, if made, will lead to any transaction,’’ Takeda said. Its cancer research unit, Takeda Oncology, is based in Cambridge.


The announcement lifted Shire’s shares more than 12 percent to close at $144.53 on the Nasdaq exchange Wednesday, signalling that the second-biggest biopharma employer in Massachusetts could be in play.

Takeda said that buying Shire, which specializes in rare-disease treatments as well as the ADHD drug Adderall, would bolster its portfolio of oncology, neuroscience, and gastroenterology drugs. It would also extend Takeda’s reach in the United States and vault the Japanese company into the ranks of the world’s top drug makers.

Shire said no offer has yet been received. Nonetheless, the announcement sent ripples through the world of biopharma in Massachusetts, where Shire has more than 3,000 employees, most of them in Lexington.

Only Sanofi Genzyme, the rare-disease unit of the French drug giant Sanofi SA, is bigger, with 5,000 employees, according to the Massachusetts Biotechnology Council.

Leora Schiff, principal at Altius Strategy Consulting, a biopharma consulting firm in Somerville, said that if Takeda buys Shire, it would probably mean consolidation of employees in the Massachusetts biotech hub. That could mean layoffs.

Shire bought Cambridge-based Baxalta International Inc., with a pipeline of cancer drugs, in 2016, for $32 billion. Given Takeda Oncology’s similar focus, she said, it would make no sense to retain all of Shire’s jobs in cancer research.


“Companies that acquire are always looking for savings of some sort,’’ she said.

She also said Takeda’s announcement will almost certainly prompt other pharmaceutical companies with operations in Massachusetts to take a look at Shire.

Ken Cacciatore, a Shire analyst for Cowen and Co. in New York, agreed.

But he said he believed Shire’s stock is vastly undervalued and should fetch at least $180 a share. Investors, he said, appear to be more worried than necessary about the competition Shire’s hemophilia therapies face from new products such as Hemlibra, made by Roche.

“We think investors are taking the most negative view on those risks,” he said. The share price has “become incredibly cheap.”

If Takeda actually makes a bid for Shire, it would continue a trend in which major foreign biopharmaceutical companies have sought to expand their presence in the Boston area, the nation’s leading biotechnology hub.

In 2008, Takeda bought Cambridge-based Millennium Pharmaceuticals, one of the state’s best-known biotechnology companies, for $8.8 billion. Millennium became the cancer-fighting division Takeda Oncology.

Early last year, Takeda paid $5.2 billion for Ariad Pharmaceuticals Inc. of Cambridge, which has a blood cancer drug on the market.

“We’re seeing more foreign companies cement their commitment to Massachusetts and the incredible pipeline of breakthrough therapies being developed here,” said Robert Coughlin, chief executive of the MassBio trade group.


Jonathan Saltzman can be reached at jsaltzman@globe.com.