Shire to buy Dyax for $5.9 billion, still wants Baxalta

[November 02, 2015]  By Ben Hirschler

LONDON (Reuters) - Shire Plc has agreed to buy Dyax Corp for about $5.9 billion to gain access to the drug developer's late-stage experimental treatment for a dangerous inflammatory disease that can block breathing.

The deal is the latest in a string of purchases by the acquisitive Dublin-headquartered company, which is also seeking to buy Baxalta to establish itself as the world leader in medicines for rare diseases.

The offer price of $37.30 per share represents a 35.5 percent premium to Dyax's closing stock price on Friday.

Dyax shareholders will also get a non-tradable contingent value right potentially worth $4.00 a share, or an additional $646 million, if Dyax's DX-2930 drug is approved for hereditary angioedema (HAE).

Shares in the U.S. biotech firm jumped to $37 in premarket trading on Monday, while Shire's stock in London fell 1.2 percent.
 

Shire is already locked in a battle to acquire Baxalta, although a steep drop in its shares has led some investors to suspect that takeover bid - worth $30 billion when it was announced in August - may flounder.

But Shire Chief Executive Flemming Ornskov insisted his group had capacity to do both deals.

"Even with this transaction, we will continue to have the financial firepower to pursue other value-added strategic acquisitions, including Baxalta,” he said.

Dyax already has one HAE drug on the market, called Kalbitor, but its sales totaled only $68 million last year and consensus analyst forecasts do not predict it will exceed annual sales of $100 million, according to Thomson Reuters Cortellis.

By contrast, Shire believes DX-2930 has potential to expand the number of HAE patients treated and achieve annual worldwide sales of up to $2 billion, while enjoying exclusivity beyond 2030. The new drug will complement Shire's own existing HAE treatments Firazyr and Cinryze.

Shire has secured a $5.6 billion bank loan, which, in addition to the amount undrawn under a $2.1 billion revolving credit facility, will be available to finance the transaction, which is expected to close in the first half of 2016.

Deutsche Bank, Evercore and Morgan Stanley advised Shire, while Centerview Partners acted for Dyax.

Deutsche Bank and Morgan Stanley are also providing Shire with financing for the deal.

(Additional reporting by Vidya L Nathan in Bengaluru; Editing by Mark Potter and Jason Neely)

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