Shire owner plans spending cuts

Shire owner plans spending cuts

For Christophe Weber, the boss of Japan’s Takeda Pharmaceutical, securing a $62bn (€52bn) deal last week to buy drugmaker Shire at the fifth time of asking was the easy bit.

Now he has to steer what will be one of the world’s most indebted drugmakers through the big spending cuts needed to make the financial sums work.

At the same time, he must win shareholders’ support for the largest-ever overseas purchase by a Japanese company — something he said could be helped by bringing in one or more long-term, large strategic investor. Talks on this were now starting, he said, but declined to identify the parties involved.

Shire which employs over 400 people in Dublin and Co Meath had said last year it had plan to grow significantly in Ireland.

Mr Weber said in an interview that his prescription for a smooth merger was planning, speed and a surgical focus on culling experimental drugs that fail to offer the high level of medical innovation demanded by cash-strapped insurers and governments.

“It’s really important that we don’t waste resource on assets that are moderately innovative.

“When you combine two pipelines you can be more stringent,” he said as he met investors and analysts in London.

Takeda will either dispose of programmes that don’t make the cut or spin them off into separate biotech companies in which it could retain a stake, the latter being a strategy is has pursued around 10 times in the past, Mr Weber said.

It is a delicate task. For the past decade, ramming together two drugmakers in mega-mergers has been unpopular, following the R&D disruption caused by past deals like Pfizer’s acquisition of Wyeth in 2009.

Indeed, Frenchman Mr Weber has direct experience of one such deal that fell short of expectations after working at GlaxoSmithKline when it was formed in 2000 by the combination of Glaxo Wellcome and SmithKline Beecham.

“It’s very important that we keep the momentum and don’t get disrupted,” he said. “We rely on R&D to grow.”

Takeda struck the agreement to take over the London-listed Shire on May 8, a deal that will propel the Japanese company from a mid-size pharma player into the top 10 rankings of global drugmakers by sales, alongside the likes of Novartis and Pfizer.

- Reuters

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