Takeda to cut 'moderately innovative' R&D after $62B Shire buy: Reuters

Takeda US facility
CEO Christophe Weber thinks Shire's focus on later-stage drug development over early research will make integrating the two companies easier than is typical for similar deals. (Takeda)

Takeda's $62 billion acquisition of Shire will catapult it into the top 10 pharma companies worldwide—but not without cost. The deal will add tens of billions of dollars to the Japanese pharma's debt load, necessitating precise cost-cutting to stay afloat without stifling innovation.  

CEO Christophe Weber's plan involves signing on one or more large, long-term investors, as well as keeping its R&D pipeline alive by discarding programs that don't deliver, Reuters reported

"It's really important that we don't waste resource on assets that are moderately innovative. When you combine two pipelines you can be more stringent," he said in London, where he is meeting with investors and analysts, according to Reuters. 

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It could hive off these programs into separate biotechs in which it could have a stake, or just dump them altogether, Weber told Reuters. However he does it, he'll have to pull it off without hampering R&D: "It's very important that we keep the momentum and don't get disrupted," he said. "We rely on R&D to grow." 

RELATED: Shire and Takeda come to terms with a $64B deal, the biggest pharma M&A in years

Weber thinks Shire's focus on later-stage drug development over early research will make integrating the two companies easier than is typical for similar deals. "There is no large research center that needs to be closed," Reuters reported.

All told, Takeda aims to save $1.4 billion by the end of the three years after the deal closes and slash 6% to 7% of the combined workforce, about 3,600 employees based on the companies' latest employee tallies. Weber acknowledges that Takeda's in danger of losing key staff and is creating a staff retention program, Reuters reported. 

RELATED: Looming Velcade freefall shows why Takeda paid big for Shire

As for possible long-term investors, Takeda is already in talks with some prospects, but Weber declined to say who. 

"There are multiple possibilities of long-term investors, such as government funds or others," Weber said. "A long-term, strategic, stable investor would be great for us."  

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