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Takeda Acquires Ariad for $5.2 Billion

Prohost Biotech - Monday, January 09, 2017

ARIAD Pharmaceuticals’ (ARIA) stock jumped 75% today. The oncology firm entered into a definitive agreement to be acquired by Takeda Pharmaceutical Company Limited under which Takeda will acquire all of the outstanding shares in ARIAD for $24.00 per share in cash, or a total enterprise value of approximately $5.2 billion, representing a premium of approximately 75 percent over ARIAD’s closing price on January 6, 2017.

Under the terms of the agreement, ARIAD stockholders will receive $24.00 in cash for each share of ARIAD common stock they own. The transaction has been approved unanimously by the boards of directors of both companies, and is expected to close by the end of February 2017, subject to required regulatory approvals and other customary closing conditions.

Under the terms of the agreement, the acquisition is structured as an all cash tender offer for all of the outstanding shares of ARIAD common stock, followed by a merger in which remaining shares of ARIAD would be converted into the right to receive the same $24.00 cash per share price paid in the tender offer.

The transaction is subject to the tender of a majority of ARIAD common stock on a fully diluted basis as well as other customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the antitrust laws of applicable foreign jurisdictions. The transaction is expected to close by the end of February 2017.

Takeda Pharmaceuticals U.S.A., a wholly owned subsidiary of Takeda, has established Kiku Merger Co., Inc. to effect the transaction.

JPMorgan, Goldman, Sachs & Co. and Lazard acted as financial advisors to ARIAD Pharmaceuticals and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as the Company’s legal advisor. Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Takeda Pharmaceutical Company Limited. Evercore Partners acted as financial advisor to Takeda Pharmaceutical Company Limited.

The tender offer described in this press release has not yet commenced. This press release is provided for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any securities. At the time the tender offer is commenced, Takeda and Merger Sub intend to file with the Securities and Exchange Commission (the “SEC”) a Tender Offer Statement on Schedule TO containing an offer to purchase, a form of letter of transmittal and other documents relating to the tender offer, and ARIAD intends to file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer. Takeda, Merger Sub and ARIAD intend to mail these documents to ARIAD’s stockholders. 

Investors and stockholders should read those filings carefully when they become available as they will contain important information about the tender offer. Those documents may be obtained without charge at the SEC’s website at www.sec.gov. The offer to purchase and related materials may also be obtained (when available) for free by contacting the information agent for the tender offer.

Prohost Observations

We congratulate our subscribers who agreed with our assessment that Ariad is a first class scientific leader and developer of unique cancer products in spite of the fierce unremitting attacks by self-serving bloggers. They kept spreading skepticism against Ariad since the day its cancer drug Iclusig (ponatinib) was FDA approved and marketed for adult patients with chronic phase, accelerated phase, or blast phase chronic myeloid leukemia (CML) or Philadelphia chromosome positive acute lymphoblastic leukemia (Ph+ ALL) for whom no other tyrosine kinase inhibitor (TKI) therapy is indicated. The drug was approved to treat adult patients with T315I-positive chronic myeloid leukemia (chronic phase, accelerated phase, or blast phase) or T315I-positive Ph+ ALL.

Patients who were treated with this drug had no other options and for many of them the drug was their life savior, as their cancers had resisted all other existing treatments. 

The attacks on this firm continued as Ariad second product Brigatinib demonstrated promising results in the treatment of anaplastic lymphoma kinase positive (ALK+) non-small cell cancer (NSCLC) whose disease is resistant to crizotinib. 

The fierce attacks led many investors to abandon ship, causing several selloffs in Ariad’s stock. It was obvious however that large pharmaceutical firms recognized the value of Ariad Pharmaceuticals and of its capability in creating drugs for cancers that have yet to find treatments. Takeda came forward and brought Ariad into its camp and explained the reasons, which we believe are the same as what we were preaching our readers all along. 

Here is what Christophe Weber, president and chief executive officer of Takeda said about Ariad following the announcement of the acquisition, “The acquisition of ARIAD is a unique opportunity that will enable us to positively impact the lives of more patients worldwide, advance our strategic priorities and generate attractive returns for our shareholders. This is a very exciting time for Takeda as we will broaden our hematology portfolio and transform our global solid tumor franchise through the addition of two innovative targeted therapies. Opportunities to acquire such high-quality, complementary targeted therapies do not come often, and we are very excited about the potential for this transaction to benefit patients, our shareholders and other stakeholders.”

Again we congratulate those who were not mislead by the fierce attack on Ariad and decided to keep the stock.  

Prohost Forward-Looking Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.


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