Takeda must sell gastro drug to merge with Shire - EU regulators

European regulators have officially rubber stamped Takeda’s $62 billion takeover of Shire, although the merged company will have to sell off a pipeline clinical trial drug for inflammatory bowel disease.

Takeda already markets Entyvio (vedolizumab) and EU regulators are concerned that the merger would limit competition in this part of the drug market.

To avoid the overlap Takeda and Shire have committed to divest SHP647, which is in late-stage development, and certain associated rights.

The divestment is not a condition for completion, and Takeda said it expects SHP647 to “attract interest from a number of potential buyers.”

Takeda said it remained “committed” to Entyvio, which has been granted marketing authorisation in more than 60 countries and is the “cornerstone” of its portfolio of gastrointestinal drugs.

EU approval of the merger was one of the final hurdles to overcome to finalise the deal after clearing antitrust regulators in other markets.

Takeda must now overcome a small group of rebel shareholders at an extraordinary general meeting on 5 December in Osaka, which has been brought forward to allow a potential closure date of 8 January.

The rebels, led by some members of Takeda's founding family, are concerned about the amount of debt needed to finance the deal.

Takeda will have to take out a bank loan of up to $31 billion to finance the merger, and shareholders are concerned about the repayments following what will be the largest ever foreign takeover by a Japanese company.

Shire's shareholders are to vote on the deal on the same day.

[caption id="attachment_23394" align="alignnone" width="142"]  Christophe Weber[/caption]

Christophe Weber, president and CEO of Takeda, said: “We are very pleased to have secured clearance from the European Commission, the final regulatory approval required to proceed with our acquisition of Shire.

“We are another step closer to creating a global, values-based, R&D-driven biopharmaceutical leader, and after several months of constructive dialogue, we are optimistic that our shareholders recognise the significant long-term value creation potential of this powerful combination.”