Speculation and rumours surround UK listed pharma company Shire again as a possible takeover target.
U.S pharmaceutical companies are ever more looking to move to the UK due to tax advantages. After Pfizer’s attempted takeover of AstraZeneca actually, it was inedible that Shire was going to have more speculation surrounding its future. During the past few months Shire’s shares have actually increased by 22 percent and although that might have been boosted by an early release of a new eye treatment. Many experts believe its due to Pfizer examining a bid for AstraZeneca.
Potential buyers could be, Allergen who are under pressure themselves from a possible hostile bid by Valeant, which has been backed by activist investor Bill Ackman and also AstraZeneca. Neither has made an approach which has needed a public statement.
So, why Shire then? Well there is plenty of confidence in its pipeline of drugs which are currently under development, which has diversified away from the ADHD drugs from which they made there name. Now rare diseases, gastro-intestinal treatments and ophthalmology are more associated with the Shire name.
Like many of the bigger pharma companies, this diversification has come through acquiring other companies, including the $4.2 billion take over of antiviral specialist ViroPharma and $260 million deal for liver disease company Lumena, which has just happened in the last six months. Shire are also thought to be eyeing up US based NPS, which has a new medicine for short bowel syndrome as well as a $5 billion credit facitility in place.
No all of the acquisitions Shire has made have been succcessful, recently they sold off skin treatment Dermagraft at a loss. Still there seems to be enough going on to keep investors and analysts happy. Peter Verdult, analyst at Citi, recently hiked his share price target for the company to £40, based on the line-up of medicines in development.
Its size, with a £20 billion ($33 billion) market value, makes it more digestible than a company of AstraZeneca‘s magnitude.
And the company has recently taken on a new chairman, former investment banker Susan Kilsby, who used to be co-head of Credit Suisse’s mergers and acquisition business in Europe, a background which has piqued investors’ interest.