What Would Help Takeda Afford Shire? Subtracting Its ADHD Unit

(Bloomberg) -- Takeda Pharmaceutical Co.’s potential offer for Shire Plc doesn’t look like quite as much of a stretch if you subtract a key piece.

Takeda cited Shire’s neuroscience division among the assets it would gain with the possible purchase. Shire said in August that it was considering a spinoff of the unit, which makes treatments for hyperactivity and attention-deficit disorders.

After Shire’s stock surged Wednesday, its value ranged as high as $50 billion, surpassing that of Takeda’s own and raising questions about the Osaka, Japan-based company’s ability to finance such a deal. And as it stands, the two companies’ strategic fit isn’t tight, according to analysts from Sanford Bernstein.

“The portfolio and operational footprint do not match well” besides a modest overlap in gastro-intestinal medicines and in Japan, and Takeda will likely “be paying more than its market cap,” they said in a note to clients.

Shire’s neuroscience division had 2017 sales of about $2.66 billion, and analysts at Morgan Stanley last year estimated its value at about $11 billion with a single drug, Vyvanse, accounting for about $8.2 billion of that.

©2018 Bloomberg L.P.