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| Shire CEO Flemming Ornskov |
Shire ($SHPG) may not be looking to get bought any time soon, but the company is fairly certain it'll hear some overtures, reportedly retaining an investment bank to handle incoming offers.
Citing sources close to the company, Reuters reports that Shire has hired Citi to stand by its side as it prepares to hear from larger rivals enticed by its stable of CNS and rare-disease therapies, its pipeline of ophthalmalogy drugs and, perhaps most alluring, its Irish nationality.
U.S. companies are increasingly looking to merge with their U.K. counterparts in search of a lower corporate tax rate, through a method called inversion. Such potential savings were at the heart of Pfizer's ($PFE) now-stalled $118 billion bid on AstraZeneca ($AZN) this year, and Medtronic ($MDT), among the world's largest medical device companies, is chasing similar gains in its recently announced $42.9 billion agreement to acquire competitor Covidien ($COV).
Reuters' sources say Shire, with a market cap of around $35 billion, could be an ideal target for Bristol-Myers Squibb ($BMY), Amgen ($AMGN) or AbbVie ($ABBV), adding that a deal could well come along this year.
Unwanted interest is nothing new for Shire. In April, Reuters' sources said Allergan ($AGN) approached the drugmaker about a deal, an offer Shire shook off. Allergan, of course, is now in the midst of a protracted squabble with serial acquirer Valeant Pharmaceuticals ($VRX), which, along with activist investor Pershing Square, is mounting a hostile effort to acquire the company for about $54 billion in cash and stock.
If Shire wants to avoid that same fate, analysts say it needs to take a bullish M&A tack of its own. Names like Sarepta Therapeutics ($SRPT) and Prosensa ($RNA), makers of promising treatments for Duchenne muscular dystrophy, have been bounced around as potential targets, as has ThromboGenics, maker of the eye drug Jetrea, which announced earlier this year that it was looking into strategic alternatives.
Shire CEO Flemming Ornskov has hardly shied away from deals, presiding over 6 acquisitions in his 14 months on the job. The company's last major foray into M&A came with its $4.2 billion acquisition of ViroPharma last year, paying a heavy premium to complement its Firazyr franchise, and the company most recently signed a $260 million deal for Lumena Pharmaceuticals and its stable of liver treatments.
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