gamesinvestor
27 Apr 2018
Re: A View from Seeking Alpha Let's all hope that Takeda doesn't fall away or we are in for a rough ride.Games
gamesinvestor
27 Apr 2018
Good start ... [link] no one really believes in Takeda and the lack of another bidder is a real disappointment - well to date anyhow !Games
KeithLeo
27 Apr 2018
A View from Seeking Alpha SHPG reported solid Q1 results.SHGP faces near term LOE for Lialda and potential competition for Xiidra if AGN loses a patent challenge for Restasis.At 11% of revenue SHPG's R&D costs are paltry.At "normalized R&D" expenses SHPG's buyout offer from TKPYY could be about 17x run-rate EBITDA.I rate SHPG a hold.Shire (SHPG) delivered Q1 2018 revenue of $3.77 billion and eps of $0.32. The company beat on revenue by $50 million and also beat on eps. Total revenue was up 5% Y/Y. Of note is that revenue generated from recently launched products (from 2013 to 2017) was $464 million, up 77% Y/Y. I had the following takeaways on the quarter:Shire's Rare Disease Franchise Growing At Double DigitsShire is known for its rare disease franchise and it grew by 10% Y/Y. The results were impressive given the $2.7 billion in total sales from the franchise. Revenue growth was broad-based as each of the company's rare disease segments showed traction.Immunology (31% of total product sales) was up 8% on the strength of immunoglobulin therapies and bio therapeutics products. Both of these sub-groups showed double-digit growth during the quarter. Immunoglobulin growth was primarily driven by subcutaneous products. Hematology (26% of total revenue) was up 9% on the strength of adynovate (treats hemophilia in children).Revenue from Neuroscience actually fell 2% Y/Y, a sharp departure from Q4 when its revenue rose by double-digits. Sales of Lialda (ulcerative colitis) fell 65% due to generic competition that materialized in the second half of 2017. Teva (TEVA) was also approved for a generic version last month, which could further hurt Lialda's sales. Neuroscience represents 25% of total revenue and could be a headwind for the rest of 2018.Of note, Shire's ophthalmics grew revenue by over 60%. The lion's share came form Xiidra, which treats dry eye. Mylan (MYL) has challenged patents for Allergan's (AGN) Restasis dry-eye drug. If it wins an inter partes review ("IPR"
then generic Restasis could be here in the second half of 2018. This could hurt sales of Xiidra, another catalyst for Shire.Were Results Good Enough To Warrant A Takeda Takeover?Takeda (OTCPK:TKPYY) is reportedly in talks to acquire Shire for $64 billion; including the company's net debt of $18 billion its total enterprise value ("EV" would be about $82 billion. Takeda's growth prospects within Japan may be limited, so it may have to grow through acquisition. At an EV of $82 billion Shire would be valued at about 13x run-rate EBITDA. The question remains, "Is Shire the right target at this price?"Shire grew revenue in the high single-digits while EBITDA was up over 40% Y/Y. Gross margins improved to 70% from 63% in the year earlier period. Shire also reduced SG&A to 21% of revenue from 25% in the year earlier period. I doubt these gains can continue in perpetuity. The company's R&D costs were paltry at 11% of total revenue. I previously highlighted that for selected pharmaceutical companies R&D expense was around 21% of total revenue.Assuming "normalized" R&D expenses at 21% of total revenue, Shire's quarterly R&D expenses would increase by about $386 million. The company's run-rate EBITDA would decline to$4.7 billion, putting Takeda's buyout multiple at 17x run-rate EBITDA. I believe this valuation is robust for a company with mid-single digit revenue growth and potential near term loss of exclusivity ("LOE". I also understand that Vyvance (treats ADHD) could be subject to LOE by 2023:His primary point was that Shire Neuroscience is currently estimated to have an $11 billion value, but that value will deteriorate with time primarily because of the future value of Vyvanse. Vyvanse is currently a $2 billion/year drug and has a patent expiration in 2023.In Q1 Vyvance generated of $628 million, up 12% Y/Y. It represented over 15% of Shire's total product sales, and over 65% of Neuroscience sales. This is another obstacle that hurt Shire's deal value.Conclusi
axolotl
25 Apr 2018
Re: Mr Market... Good. Perhaps the directors can now get back to managing the business and stop distracting themselves gazing at pots of gold at the end of the rainbow.
KeithLeo
25 Apr 2018
Re: Takeda Thanks for the info Games
gamesinvestor
25 Apr 2018
Mr Market... seems convinced this isn't going to fly, that there are no new bidders and it's going to fall at the final fence ---- eeek!!!back down at £39Games
Rhigos
25 Apr 2018
Re: uncertainty remains... From Bloomberg TV this morning it seems like there is doubt Takeda can really afford purchase of Shire. Their shareholders showing doubts and Takeda share price falling sharply. It is feared that if deal goes ahead Shire shareholders will dump Takeda shares causing further falls. It also of course means that deal is becoming worth less to Shire investors as Takeda shares fall in value.I guess a lot of PI's of Shire, like me, do not fancy holding Japanese shares.
gamesinvestor
25 Apr 2018
uncertainty remains... On a few fronts - not least this statement from Takeda :-[link] confirmed the statement, adding that it reserves the right to alter the mix of the proposal and reminded that it could still refrain from making any firm offer.""Surely if they altered the mix, Shire would not recommend it, and if they are reserving the right not to make a firm offer, isn't this because they look to have made the verbal offer (sounding) of £49 ish without proper financial backing?All a bit messy really -- well I guess they have quite a while to lose the deal if as suspected Shire keep holding out for a higher cash offer from a bigger company.Games
schwee
25 Apr 2018
Re: EXTENSION GRANTED TO 08 MAY Investor KT,Shire have no need of an extension to know whether the bid is financially viable. Clearly it is not.Real reason for extension is to flush and flesh out an agreed bid from a stronger suitor.
Investor KT
25 Apr 2018
EXTENSION GRANTED TO 08 MAY See RNS dated today (25/4) & released at 00.10 hours. It also goes into detail about the bid components (cash & Takeda shares split), other conditions to be fulfilled etc. Also includes condition to allow Shire to do due diligence on Takeda (I guess to check it is a financially viable bid).Best wishes.
gamesinvestor
24 Apr 2018
Re: Takeda Keith, Takeda today is listed on the Japanese stock market and in Yen.If the deal goes ahead, Takeda have said that they will do another listing of Takeda shares in New York as ADRs (American Depository Receipts).You could then hold them via a UK broker and for dividends you will be subject to withholding tax at 30% or 15% if you fill out a W8-BEN form via your broker to address the US/UK dual tax agreement.Alternatively once the deal is announced and the price listed in the UK gets close to the deal price announced (as it will take ages for it to be de-listed off the UK market) you can dump the lot, prior to all the legal matters being agreed, and buy something else in the UK.If you have your shares in an ISA or SIPP then you won't be subject to Capital Gains Tax. If not, any gain over the annual free gains tax allowance will be subject to either 18% or 28% gains tax rates depending on your income tax band.Games
KeithLeo
24 Apr 2018
Re: Takeda Can any one explain, as a UK resident, how we hold Takeda shares if this bid goes through. iii shows a quote on the LSE international market which is in Swiss Francs, so I am confused... help.
TheFamousGrouse
24 Apr 2018
Re: Extending Until a formal offer is made I don't think anyone will step into the fray. The big drug companies will all have decided the value of Shire. Once a bid is made they may see an opportunity if its below their target price. I assume Takeda and many others would like Shire because its cheap and offers tax advantages. Why would you want Takeda shares when they have a weaker pipeline than Shire. Its not a good swap just a dilution of the future growth. I will need to take my money and run.
gamesinvestor
24 Apr 2018
Extending It seems likely that Shire will play out the game with Takeda by calling for an extension and keeping the door open for another rival bidder whilst they continue to extract every last cent out of a desperately (and possibly rather silly over indebted) 5th bidding suitor.Anyone know how long an extension is legally allowed?1 week maybe?Mind you -- another bidder would surely have arrived on the scene by now, no?Games -- Come on let's get it over with so we can all move on with some cash.
gamesinvestor
24 Apr 2018
Re: Takeda Prov, I'm staying out of additional pharma holdings, at least those that are highly indebted, practice too much creative accounting and have expensive R&D.I'll retain Novo Nordisk, Advanced Medical and Alliance Pharma, which collectively represent about 7.5% of my wad.Games
