There were times during Shire’s slow-motion takeover of Baxalta that journalists joked that they had forgotten that the M&A effort was still on. But on Friday the two companies reached the end of a long set of negotiations, formally completing a $32 billion merger that creates a big biopharma company with 22,000 staffers worldwide focused primarily on rare diseases.
The next big step will be slicing out the $500 million in “synergies” that were promised with the deal--which presumably includes axing an uncertain number of jobs in the process. But Shire settled at least one mystery about its R&D structure on the first day. Shire CEO Flemming Ornskov told The Boston Globe that he plans to keep Baxalta’s new research outpost on Kendall Square, the heart of the regional biotech hub, even looking to add anywhere from 100 to 200 researchers in the process.
“We’re increasing our activity in the Massachusetts area,” Ornskov told the friendly hometown newspaper. “This is de facto one of the world’s premier hubs for biotech research. It’s great for Shire now to be in the flow of a place that’s one of the world’s centers for innovation.”
Shire may be based in Dublin for tax purposes, but under Ornskov the company has been concentrating heavily around the campus in Lexington, MA. Last year Shire ripped up much of its organization in Pennsylvania as Ornskov accelerated that process, moving hundreds of jobs to Massachusetts.
Ornskov still has a long way to go to deliver on a promise to increase revenue to more than $20 billion a year. One aspect of that campaign was highlighted in the merger release today, as Shire heralded the growing cancer drug franchise it acquired in the deal.
Baxalta has been inking a string of cancer deals since agreeing to the buyout in January. In one of those deals, the company paid Precision BioSciences $105 million upfront to get partnered on a slate of CAR-T programs. And just before the deal was signed, Baxalta inked a pact with Copenhagen-based Symphogen to collaborate on a new pipeline of checkpoint cancer therapies, paying a hefty $175 million upfront in a package worth up to $1.6 billion.
But the new Shire will continue to rely heavily on rare diseases for much of its revenue.
"Upon the completion of our combination with Baxalta, Shire is now the global leader in rare diseases, with the number one rare diseases platform based on both revenue and pipeline programs,” Ornskov boasted in a statement.
- here's the release