EU gives conditional nod for Takeda Shire megamerger

The European Commission (EC) has approved Takeda’s $62 billion acquisition on the proviso the firm divests Shire’s inflammatory bowel disease (IBD) candidate.

In May, Japanese firm Takeda struck a deal to acquire Ireland-headquartered rare diseases biopharmaceutical company Shire for $62 billion (€54 billion).

Six months on, the merger is one step closer after receiving approval under the EU Merger Regulation, on the condition of divesting Shire’s IBD candidate SHP647.

Image: iStock/Vepar5

“We can today approve the merger between Shire and Takeda, but only subject to the divestment of the product that Shire is developing to treat the disease and which could have been lost through the merger,” said commissioner Margrethe Vestager, who is responsible for competition policy. “This will preserve innovation in this market and, importantly, increase the choice of treatments for patients.”

SHP647 – previously known as PF-00547659 – is a fully human IgG2 monoclonal antibody targeting the mucosal addressing cell adhesion molecule-1 (MAdCAM-1) in Phase III trials. Shire licensed the program from Pfizer in 2016.

However, as the EC noted, SHP647 is a biologic treatment belonging to the same class of anti-integrins as Takeda’s marketed IBD drug Entyvio (vedolizumab). If a merged entity had both biologics in its portfolio it would lead to a loss of innovation and a reduction in potential future competition, the Commission said.

“The Commission’s market investigation found that Takeda would be unlikely to continue developing Shire’s new anti-integrin treatment. This would have meant a serious loss of innovation on a market where patients currently have few treatment options available to them. It would have also prevented a product from reaching the market that could compete with Entyvio and reduce prices for this type of biologic treatment.”

Entyvio pulled in JPY 201.4 billion ($1.6 billion) for Takeda in 2017 worldwide, JPY 60.2 billion of which came from the European and Canadian markets.

The EC’s decision comes a month after Japan’s Fair Trade Commission (FTC) gave the megamerger the regulatory thumbs up, and four months after the US Federal Trade Commission gave the deal clearance.

Christophe Weber, Takeda’s CEO, said the EC clearance brings the firm “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 recognize the significant long-term value creation potential of this powerful combination.”