Logos of Japanese Takeda Pharmaceutical Co are seen at an office building in Glattbrugg near Zurich
Japan’s Takeda Pharmaceutical Co Ltd (4502. T) said on Monday it would buy cancer drug maker Ariad Pharmaceuticals Inc (ARIA.O) in a deal valued at $5.20 billion, to beef up its oncology pipeline.
Ariad stock was up 74.7 percent at $23.98 in premarket trading.
Takeda has agreed to pay $24 in cash for each Ariad share, a premium of about 75 percent to its Friday close.
Ariad’s leukemia drug, Iclusig, which is expected to generate sales of $170 million-$180 million in 2016, came under fire in October for “staggering” price increases.
A U.S. Food and Drug Administration decision on its lung cancer treatment brigatinib, which is being touted as a potential blockbuster, is expected by April 29.
Cancer treatment is a target for many large drugmakers, with high prices being paid for promising assets, such as Medivation, which was bought by Pfizer Inc (PFE.N) for $14 billion.
Takeda’s negotiations to acquire Valeant Pharmaceuticals International Inc’s (VRX.TO) Salix stomach-drug business have stalled over price disagreements, Reuters reported in November, citing people familiar with the matter. reut.rs/2jkIbd9
The Ariad deal, which Takeda plans to fund by taking on $4 billion in new debt as well as existing cash, is expected to close by the end of February.
Ariad had long-term debt of about $522 million as of Sept. 30, according to a regulatory filing.
The equity value of the deal, which is expected to add to Takeda earnings in 2018, is $4.66 billion, according to Reuters calculations.
(Reporting by Natalie Grover and Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta)
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