Takeda Buys Ariad in $5.2B Cancer Drug Bet

The Japanese drug giant is paying a 75% premium for Ariad to "transform our global solid tumor franchise."
Matthew HellerJanuary 10, 2017
Takeda Buys Ariad in $5.2B Cancer Drug Bet

Japanese drug giant Takeda said it would acquire Ariad Pharmaceuticals for $5.2 billion to gain access to two cancer treatments that will expand its oncology portfolio.

Ariad’s leukemia drug, Iclusig, is expected to generate sales of $170 million to $180 million in 2016. The Cambridge, Mass.-based company is also developing a lung cancer treatment, brigatinib, which is being touted as a potential blockbuster.

Takeda agreed to buy Ariad for $24 per share in cash, a premium of about 75% to its Friday close. In trading Monday, the stock rose more than 72% to $23.75.

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“This is a very exciting time for Takeda as we will broaden our hematology portfolio and transform our global solid tumor franchise through the addition of two innovative targeted therapies,” Takeda CEO Christophe Weber said in a news release.

“Opportunities to acquire such high-quality, complementary targeted therapies do not come often, and we are very excited about the potential for this transaction to benefit patients, our shareholders and other stakeholders,” he added.

The boards of both companies have approved the deal but some analysts said a rival bid cannot be ruled out.

“Cancer drugs are appealing to large pharmaceutical firms, who are prepared to pay high prices for companies with promising products in the pipeline,” BBC News noted.

Takeda announced in September it was looking for multi-billion dollar acquisitions to reduce its dependence on domestic sales. As Reuters reports, its top-selling blood cancer drug Velcade is expected to face generic competition this year and other key products go off patent from 2020.

Ariad suspended Iclusig sales in 2013 after data showed it was associated with serious complications, but the U.S. Food and Drug Administration has approved its use in a narrower patient population.

Combining with Takeda “will allow us to not only accelerate our mission to discover, develop and deliver precision therapies to patients with rare cancers, but also deliver immediate and meaningful value to our shareholders through a substantial cash premium,” Ariad CEO Paris Panayiotopoulos said.