New Pharma Giant Already in Play as Shire Takes Aim, +45% Growth Finds The Edge
Aug 4, 2015
By Tara Lachapelle, Senior Writer, Bloomberg News:
Shire Plc makes $30 billion bid for — wait, what’s Baxalta? That was probably the reaction most had to Shire’s announcement Tuesday because Baxalta Inc. is technically only one month old. It’s the drug division that was spun off from medical-products maker Baxter International Inc. in July. It could now end up being the shortest-lived pharmaceutical giant. Shire, emerging as a major dealmaker in the industry, wasted no time, and its pursuit of Baxalta probably won’t end here. The $50 billion company said it made its all-stock bid public after Baxalta’s leadership wasn’t willing to engage in merger talks.
“It was quite a quick bid,” said Jonathan Morgan, an analyst for The Edge, a research firm that analyzes spinoffs and special situations. “We think there’s going to be a little bit of back and forth, and we’ll have to see how this plays out.” It’s understandable that Baxalta would want to see how its brand-new stock performs. Health-care spinoffs tend to do better than those in any other industry, delivering an average return of 45 percent in the first year after the separation, according to a study by The Edge and Deloitte. Even so, analysts were forecasting that Baxalta shares would…