Takeda Is Said to Weigh Sale of Shire Eye Drug to Cut Debt

(Bloomberg) -- Takeda Pharmaceutical Co. is weighing the sale of a Shire Plc eye care business once its $62 billion purchase of the U.K.-listed biotech firm is completed, as it seeks ways to cut the debt raised to fund the deal, people familiar with the matter said.

The Xiidra drug, used to treat dry eye disease, is among potential divestments being assessed by Takeda, according to the people, who asked not to be identified because the matter is private. Takeda has also been discussing with banks about a possible sale of Shire’s Natpara medicine, used to control low blood calcium levels related to decreased parathyroid hormone, the people said.

The potential disposals could help Takeda raise about $4 billion to $5 billion, depending on the assets that ultimately get sold, the people said. Deliberations are at an early stage, and Takeda hasn’t made a decision on which divestments to pursue, according to the people.

Dramatic Makeover

Takeda’s own over-the-counter drug business has been drawing potential buyer interest, though it doesn’t have any current plan to sell the unit, the people said. Chief Executive Officer Christophe Weber told Japan’s Nikkan Kogyo newspaper in July that Osaka-based Takeda does not intend to sell its OTC operations in the island nation.

Weber is overseeing a dramatic makeover that will reshape the Japanese drugmaker into a global powerhouse with a plum suite of drugs for rare diseases. Takeda secured a bridge loan facility of about $31 billion in May to help pay for the Shire purchase, in what likely is the largest borrowing ever by a Japanese company for an acquisition. 

Representatives for Shire and Takeda declined to comment.

Any sale of Shire assets would only take place after Takeda’s takeover of the drugmaker is completed, the people said. Takeda executives have said the company intends to call an extraordinary meeting to vote on the deal after obtaining regulatory approvals in more than 20 markets. The deal is expected to close in March, according to a Bloomberg survey. The company previously said the acquisition would close in the first half of 2019.

The merger has already received regulatory approval in the U.S. and Brazil, and Takeda has filed for clearance in China, Canada and Mexico. Other major markets where regulators need to greenlight the deal include the European Union and Japan. The acquisition could face tougher scrutiny in Europe, where pharmaceutical purchases often face detailed reviews to assess how drugmakers compete in each of the bloc’s 28 nations.

Shares of Takeda gained 1.7 percent in Tokyo Thursday, while the benchmark Topix Index advanced 1.1 percent.

--With assistance from Lisa Du.

To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, ;Dinesh Nair at dnair5@bloomberg.net, Fion Li, Jeff Sutherland

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