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Shire-Takeda Deal Gets Phase I Conditional European Approval

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Shire Plc announced that the European Union antitrust regulators have granted a phase I conditional approval to Takeda Pharmaceutical Co. Ltd.'s $62-billion bid to acquire the former. The European Commission has approved the deal subject to Shire selling an inflammatory bowel disease treatment, called SHP647 that could compete with a Takeda-marketed product Entyvio (vedolizumab)if SHP647 gets approved and hits the market.

Takeda stated that the clearance from the European Commission was the final regulatory approval required to proceed with its acquisition of Shire. Takeda had announced the acquisition in May 2018.

The acquisition is subject to certain other conditions, including receipt of approval from the shareholders of Shire and Takeda, the satisfaction or, where applicable, waiver of the other conditions set out in the Scheme Document, and the sanction of the Court. Assuming these conditions are met, Shire and Takeda confirmed that the acquisition will close on Jan 8, 2019.

Both the companies are leaders in their therapeutic areas and also have an attractive geographic footprint. Thus, the combined group will be better positioned to deliver highly-innovative medicines and transformative care providing better health and a brighter future for patients around the world

Shares of the company have increased 14.5% year to date, against the industry’s decline of 10.2%.

 

 

Zacks Rank & Stocks to Consider

Shire is a Zacks Rank #3 (Hold) stock.

Some better-ranked stocks worth considering are Bristol-Myers Squibb Company (BMY - Free Report) , Johnson and Johnson (JNJ - Free Report) and Merck & Co. (MRK - Free Report) . While Bristol-Myers sports a Zacks Rank #1 (Strong Buy), J&J and Merck carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bristol-Myers’ earnings per share estimates have increased from $3.62 to $3.84 for 2018 and from $3.82 to $4.08 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with average of 11.99%.

Merck’s earnings per share estimates have increased from $4.27 to $4.34 for 2018 and from $4.63 to $4.71 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with average of 3.96%. Shares of the company have increased 36% year to date.

J&J’s earnings per share estimates have increased from $8.14 to $8.16 for 2018 and from $8.61 to $8.66 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with average of 1.65%. Shares of the company have increased 36% year to date.

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