Shire reported $3.809 billion in product sales, an increase of six percent, and total revenues for the quarter of $3.920 billion, an increase of five percent. Operating income from continuing operations was $830 million, an increase of 108 percent, while non-GAAP operating income was flat at $1.492 billion. Net income was up 156 percent to $616 million.
“Shire continued to deliver on its key priorities of commercial execution, pipeline advancement, debt pay-down, and portfolio optimization during the second quarter,” said Flemming Ornskov, Shire’s chief executive officer, in a statement. “We drove product sales growth of six percent over the prior year period led by the strong performance of our Immunology franchise, continued uptake of our recently launched products, and expansion in international markets.”
Reuters notes, “Earlier on Tuesday, Takeda said its first-quarter operating profit had halved from a year ago, when it had booked gains from asset sales. It is buying Shire to broaden its drugs portfolio and plug a gap in its late-stage pipeline.”
The acquisition deal was officially made on May 8, with Takeda buying Shire for $62.2 billion. Earlier in the deal process, Shire sold its oncology business to France’s Servier for $2.4 billion. Oncology was a small part of Shire’s portfolio, bringing in about $262 million in 2017. The sale of the oncology business was unrelated to the Takeda acquisition bid.
The combined companies will have headquarters in Japan. Takeda shareholders will own about 50 percent of the merged companies. The two companies will have a combined workforce of about 52,000 people worldwide. The merged companies have projected job cuts of six to seven percent, which means cuts in the low to mid-3,000s. In addition, Takeda is considering consolidating Shire’s operations into its own in Boston, Switzerland and Singapore.
A small group of Takeda shareholders was attempting to halt the acquisition, but their bid didn’t gain traction. A group of 130 Takeda shareholders felt Takeda was taking on too much debt to pull off the deal, and it wasn’t worth it. At the annual general meeting in June, the group put their proposal to a vote, asking that advance shareholder approval be required for large acquisitions. Their proposal received about 10 percent of votes in favor, which was unlikely to lead to stopping the Shire acquisition.
In today’s announcement, Ornskov also stated, “During the quarter, our Board reached an agreement with the Takeda Board on the terms of a recommended offer for Takeda to acquire Shire. The acquisition is expected to close in H1 2019, subject to shareholder approval of both companies and additional regulatory approvals. In the meantime, we remain resolutely focused on execution as these results demonstrate.”
Shire also gave a pipeline update, noting that the U.S. Food and Drug Administration (FDA) approved Cinryze for pediatric use and the European Medicines Agency (EMA)’s Committee for Medicinal Products for Human Use (CHMP) recommended marketing authorization for Veyvondi in Europe. Ornskov added, “In addition, we gained U.S. FDA approval for our state-of-the-art plasma manufacturing facility near Covington, Georgia supporting the continued growth of our immunoglobulin portfolio.”