"This transaction is a great outcome for shareholders of ARIAD and Takeda. Both ARIAD and Takeda are passionate about helping cancer patients, and I believe the talent and resources of Takeda coupled with ARIAD's pipeline and people will accelerate the development of cancer treatments. I would like to extend my deepest gratitude to the management team and everyone at ARIAD for their unrelenting dedication," said Alexander J. Denner, Ph.D., Chairman of the Board of ARIAD.Highly strategic deal which transforms global oncology portfolio and pipeline by expanding into solid tumors and reinforcing existing strength in hematology The acquisition of ARIAD brings two innovative targeted therapies that will expand and enhance Takeda's existing oncology portfolio. Brigatinib, an investigational drug product, has the potential to add a differentiated, global therapy in a genetically-defined subpopulation of non-small cell lung cancer (NSCLC). The addition of Iclusig will broaden Takeda's strong hematology franchise to include chronic myeloid leukemia (CML) and a subset of acute lymphoblastic leukemia (ALL). Together, these two innovative targeted therapies will position Takeda for sustainable long-term growth in oncology. Takeda's track record of successful oncology product launches [ADCETRIS ® (Brentuximab Vedotin), NINLARO TM (ixazomib) and VELCADE ® (bortezomib)] means it has the experience and expertise required to deliver the successful launch of brigatinib and to ensure that it achieves global reach and share of voice thereafter. Accretive to Takeda's Underlying Core Earnings by FY2018 and generates immediate and long-term revenue growth The transaction is a compelling opportunity for Takeda shareholders. It will provide immediate revenue, bring considerable long-term revenue potential and deliver synergy savings. ARIAD provided calendar year 2016 revenue guidance for Iclusig of $170-180 million, and Takeda expects significant long-term revenue potential from the two lead assets. Takeda projects the acquisition of ARIAD to be accretive to Underlying Core Earnings by FY2018 and broadly neutral in FY2017. Strong revenue growth and synergy savings will offset increased sales and marketing costs for the brigatinib launch.
Attractive value drivers include two very innovative medicines, Iclusig and brigatinib, an exciting early stage pipeline and cost synergiesIclusig, a commercialized therapy with continued strong sales growth potential, delivers immediate value. Brigatinib, an investigational drug product with peak annual sales potential of over $1 billion, will generate significant long-term value for Takeda. U.S. approval is expected in the first half of 2017 with global filing thereafter. Beyond Iclusig and brigatinib, ARIAD's commitment and expertise in targeted kinase inhibition linked to strong translational science generated further pipeline opportunities which provide additional long-term upside potential. Takeda will leverage ARIAD's R&D capabilities and platform, and largely absorb its R&D costs within Takeda's existing R&D budget. G&A cost synergies will be fully captured by FY2018. Takeda retains financial flexibility with no impact on dividend policy The transaction will be funded by up to $4.0 billion of new debt and the remainder from existing cash. FY2017 Net Debt/EBITDA is estimated at approximately 2.6x, which is expected to remain investment grade. The transaction has no impact on Takeda's dividend policy. Transaction terms The acquisition is structured as an all cash tender offer by a subsidiary of Takeda 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 and ARIAD will become an indirect wholly owned subsidiary of Takeda. The transaction is subject to the tender of a majority of the outstanding shares of ARIAD common stock 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.
|(1)||Tender offeror||Kiku Merger Co., Inc.|
|(2)||Target company||ARIAD Pharmaceuticals, Inc.|
|(3)||Class of shares to be acquired||Common stock|
|(4)||Tender offer price||$24.00 per share|
|(5)||Acquisition amount (Aggregate tender offer price)||Approximately $5.4 billion (estimate) * The amount is an estimated amount calculated by multiplying the number of the target company's shares (fully diluted basis) by the tender offer price per share. It does not include advisory fees.|
|(6)||Payment||Cash * Funded by up to $4.0 billion of new debt and the remainder from existing cash.|
|(7)||Period of tender offer||From January, 2017 to February, 2017 ** The initial period of the tender offer will commence within 10 business days following execution of the merger agreement with ARIAD [January 8, 2017 (U.S.)], and will close 20 business days after commencement. If the situation arises whereby the conditions of the tender offer are not satisfied, the period of the tender offer will be extended, but the extension period will not exceed May 2017 (or August 2017 if antitrust clearance not received).|
|(8)||Minimum number of shares to be purchased||Consummation of the tender offer will occur once the majority of shares outstanding of the company have been tendered and other customary closing conditions have been satisfied.|
|(9)||Financial advisor to Takeda||Evercore Partners|
|(10)||Legal counsel to Takeda||Cleary Gottlieb Steen & Hamilton LLP|
|(11)||Financial advisor to ARIAD||J.P. Morgan Securities LLC, Goldman, Sachs & Co., Lazard|
|(12)||Legal counsel to ARIAD||Paul, Weiss, Rifkind, Wharton & Garrison LLP|
|(1)||Company name||ARIAD Pharmaceuticals, Inc.|
|(2)||Headquarters||125 Binney Street, Cambridge, Massachusetts 02142, USA|
|(3)||Representative||Paris Panayiotopoulos, President and Chief Executive Officer|
|(4)||Business description||ARIAD Pharmaceuticals, Inc., headquartered in Cambridge, Massachusetts is focused on discovering, developing and commercializing precision therapies for patients with rare cancers. ARIAD is working on new medicines to advance the treatment of rare forms of chronic and acute leukemia, lung cancer and other rare cancers. ARIAD utilizes computational and structural approaches to design small-molecule drugs that overcome resistance to existing cancer medicines.|
|(5)||Capital||US$1,339 million (Additional paid-in capital as of December 31, 2015)|
|(6)||Date of establishment||April, 1991|
|(7)||Major shareholders and percentage of shares held*||Wellington Management Group LLP||8.8%|
|Vanguard Group Inc.||6.8%|
|(8)||Relationships between Takeda||Capital relationship||Not applicable|
|Personnel relationship||Not applicable|
|Transactional relationship||Not applicable|
|(9)||Operating result and financial conditions for the last three years (consolidated)|
|Accounting period||Fiscal year ended December 31, 2013||Fiscal year ended December 31, 2014||Fiscal year ended December 31, 2015|
|Net assets (US$ in thousands)||185,517||80,801||(103,141)|
|Total assets (US$ in thousands)||370,894||603,116||546,692|
|Net assets per share (US$)||1.01||0.43||(0.55)|
|Revenue (US$ in thousands)||45,561||105,412||118,804|
|Operating profit (US$ in thousands)||(273,566)||(160,195)||(217,276)|
|Net loss (US$ in thousands)||(274,158)||(162,602)||(231,156)|
|Net loss per share (US$)||(1.49)||(0.87)||(1.23)|
|(1)||Number of shares already acquired||0 shares Percentage of voting rights: 0%|
|(2)||Number of shares to be acquired||194,389,661 shares* Percentage of voting rights: 100% (planned) * Total shares outstanding|
|(1)||Board meeting resolution||January 6, 2017|
|(2)||Signing date||January 8, 2017|
|(3)||Commencement date and settlement date of the tender offer||From January, 2017 to February, 2017 **The initial period of the tender offer will commence within 10 business days following execution of the merger agreement with ARIAD [January 8, 2017 (U.S.)], and will close 20 business days after commencement. If the conditions of the tender offer are not satisfied, the period of the tender offer will be extended, but the extension period will not exceed May 2017 (or August 2017 if antitrust clearance not received).|
|(4)||Completion of acquisition||By the end of February, 2017 (planned) *|
FY2017 and beyondIt is expected that the acquisition of ARIAD will be accretive to Takeda's Underlying Core Earnings by FY2018 and broadly neutral in FY2017. Strong revenue growth and synergy savings will offset increased sales and marketing costs for the brigatinib launch. Takeda's financial guidance, including EPS, for FY2017 will be announced when Takeda reports earnings for FY2016 in May 2017. Conference Call Webcast Information Takeda will host a media/investors conference call at 7:30 p.m. EST January 9, 2017 (9:30 a.m. JST January 10, 2017) to discuss the transaction. You can listen to the conference call at the following link: http://www.Takeda.com/investor-information/results/ A replay of the conference call will be available within 24 hours. In light of this announcement, ARIAD will not be presenting today at the 35 th Annual J.P. Morgan Healthcare Conference. About Takeda Pharmaceutical Company Takeda Pharmaceutical Company Limited is a global, research and development-driven pharmaceutical company committed to bringing better health and a brighter future to patients by translating science into life-changing medicines. Takeda focuses its R&D efforts on oncology, gastroenterology and central nervous system therapeutic areas plus vaccines. Takeda conducts R&D both internally and with partners to stay at the leading edge of innovation. New innovative products, especially in oncology and gastroenterology, as well as our presence in Emerging Markets, fuel the growth of Takeda. More than 30,000 Takeda employees are committed to improving quality of life for patients, working with our partners in health care in more than 70 countries. Additional information about Takeda is available through its corporate website, www.Takeda.com. About Iclusig ® (ponatinib) tablets Iclusig is a kinase inhibitor. The primary target for Iclusig is BCR-ABL, an abnormal tyrosine kinase that is expressed in chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL). Iclusig was designed using ARIAD's computational and structure-based drug-design platform specifically to inhibit the activity of BCR-ABL. Iclusig targets not only native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other approved TKIs. Iclusig is approved in the U.S., EU, Australia, Switzerland, Israel, Canada and Japan.
In the U.S., Iclusig is a kinase inhibitor indicated for the:
- Treatment of 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.
- Treatment of adult patients with T315I-positive chronic myeloid leukemia (chronic phase, accelerated phase, or blast phase) or T315I-positive Ph+ ALL.
- Arterial occlusion has occurred in at least 35% of Iclusig ® (ponatinib)-treated patients including fatal myocardial infarction, stroke, stenosis of large arterial vessels of the brain, severe peripheral vascular disease, and the need for urgent revascularization procedures. Patients with and without cardiovascular risk factors, including patients less than 50 years old, experienced these events. Interrupt or stop Iclusig immediately for arterial occlusion. A benefit-risk consideration should guide a decision to restart Iclusig.
- Venous Thromboembolism has occurred in 6% of Iclusig-treated patients. Monitor for evidence of thromboembolism. Consider dose modification or discontinuation of Iclusig in patients who develop serious venous thromboembolism.
- Heart Failure, including fatalities occurred in 9% of Iclusig treated patients. Monitor cardiac function. Interrupt or stop Iclusig for new or worsening heart failure.
- Hepatotoxicity, liver failure and death have occurred in Iclusig-treated patients. Monitor hepatic function. Interrupt Iclusig if hepatotoxicity is suspected.
Monitor patients for fluid retention and manage patients as clinically indicated. Interrupt, reduce, or discontinue Iclusig as clinically indicated.Cardiac arrhythmias: Arrhythmias occurred in 19% (86/449) of Iclusig-treated patients, of which 7% (33/449) were grade 3 or greater. Arrhythmia of ventricular origin was reported in 3% (3/86) of all arrhythmias, with one case being grade 3 or greater. Symptomatic bradyarrhythmias that led to pacemaker implantation occurred in 1% (3/449) of Iclusig-treated patients. Atrial fibrillation was the most common arrhythmia and occurred in 7% (31/449) of patients, approximately half of which were grade 3 or 4. Other grade 3 or 4 arrhythmia events included syncope (9 patients; 2.0%), tachycardia and bradycardia (2 patients each 0.4%), and electrocardiogram QT prolonged, atrial flutter, supraventricular tachycardia, ventricular tachycardia, atrial tachycardia, atrioventricular block complete, cardio-respiratory arrest, loss of consciousness, and sinus node dysfunction (1 patient each 0.2%). For 27 patients, the event led to hospitalization. In patients with signs and symptoms suggestive of slow heart rate (fainting, dizziness) or rapid heart rate (chest pain, palpitations or dizziness), interrupt Iclusig and evaluate. Myelosuppression: Myelosuppression was reported as an adverse reaction in 59% (266/449) of Iclusig-treated patients and grade 3/4 myelosuppression occurred in 50% (226/449) of patients. The incidence of these events was greater in patients with AP-CML, BP-CML, and Ph+ ALL than in patients with CP-CML. Severe myelosuppression (Grade 3 or 4) was observed early in treatment, with a median onset time of 1 month (range <1-40 months). Obtain complete blood counts every 2 weeks for the first 3 months and then monthly or as clinically indicated, and adjust the dose as recommended. Tumor Lysis Syndrome: Two patients (<1%, one with AP-CML and one with BP-CML) treated with Iclusig developed serious tumor lysis syndrome. Hyperuricemia occurred in 7% (31/449) of patients. Due to the potential for tumor lysis syndrome in patients with advanced disease, ensure adequate hydration and treat high uric acid levels prior to initiating therapy with Iclusig. Reversible Posterior Leukoencephalopathy Syndrome (RPLS): Postmarketing cases of reversible posterior leukoencephalopathy syndrome (RPLS—also known as Posterior Reversible Encephalopathy Syndrome (PRES)) have been reported in Iclusig-treated patients. RPLS is a neurological disorder that can present with signs and symptoms such as seizure, headache, decreased alertness, altered mental functioning, vision loss, and other visual and neurological disturbances. Hypertension is often present and diagnosis is made with supportive findings on magnetic resonance imaging (MRI) of the brain. If RPLS is diagnosed, interrupt Iclusig treatment and resume treatment only once the event is resolved and if the benefit of continued treatment outweighs the risk of RPLS. Compromised Wound Healing and Gastrointestinal Perforation: Since Iclusig may compromise wound healing, interrupt Iclusig for at least 1 week prior to major surgery. Serious gastrointestinal perforation (fistula) occurred in one patient 38 days post-cholecystectomy. Embryo-Fetal Toxicity: Based on its mechanism of action and findings from animal studies, Iclusig can cause fetal harm when administered to a pregnant woman. In animal reproduction studies, oral administration of ponatinib to pregnant rats during organogenesis caused adverse developmental effects at exposures lower than human exposures at the recommended human dose. Advise pregnant women of the potential risk to the fetus. Advise females of reproductive potential to use effective contraception during treatment with Iclusig and for 3 weeks after the last dose. Most Common Adverse Reactions: Overall, the most common non-hematologic adverse reactions (=20%) were abdominal pain, rash, constipation, headache, dry skin, fatigue, hypertension, pyrexia, arthralgia, nausea, diarrhea, lipase increased, vomiting, myalgia and pain in extremity. Hematologic adverse reactions included thrombocytopenia, anemia, neutropenia, lymphopenia, and leukopenia. Please see the full U.S. Prescribing Information for Iclusig, including the Boxed Warning. Iclusig is a registered trademark of ARIAD Pharmaceuticals, Inc.
Additional InformationThe 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 its wholly owned subsidiary, Kiku Merger Co., Inc., 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, Kiku Merger Co., Inc. and ARIAD intend to mail these documents to the ARIAD stockholders. Investors and shareholders 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. Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking information related to Takeda, ARIAD and the proposed acquisition of ARIAD by Takeda that involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements in this document include, among other things, statements about the potential benefits of the proposed acquisition, anticipated earnings accretion and growth rates, Takeda's and ARIAD's plans, objectives, expectations and intentions, the financial condition, results of operations and business of Takeda and ARIAD, ARIAD's products, ARIAD's pipeline assets, and the anticipated timing of closing of the acquisition. Risks and uncertainties include, among other things, risks related to the satisfaction of the conditions to closing the acquisition (including the failure to obtain necessary regulatory approvals) in the anticipated timeframe or at all, including uncertainties as to how many of ARIAD's stockholders will tender their shares in the tender offer and the possibility that the acquisition does not close; risks related to the ability to realize the anticipated benefits of the acquisition, including the possibility that the expected benefits from the proposed acquisition will not be realized or will not be realized within the expected time period; the risk that the businesses will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships; negative effects of this announcement or the consummation of the proposed acquisition on the market price of Takeda's common stock and on Takeda's operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed acquisition; other business effects, including the effects of industry, market, economic, political or regulatory conditions; future exchange and interest rates; changes in tax and other laws, regulations, rates and policies; future business combinations or disposals; the uncertainties inherent in research and development, including the ability to sustain and increase the rate of growth in revenues for ARIAD's products despite increasing competitive, reimbursement and economic challenges; whether and when any drug applications may be filed in any jurisdictions for any indications or any additional indications for ARIAD's products or for ARIAD's pipeline assets; whether and when the FDA or any other applicable regulatory authorities may approve any such applications, which will depend on its assessment of the benefit-risk profile suggested by the totality of the efficacy and safety information submitted; decisions by the FDA or other regulatory authorities regarding labeling and other matters that could affect the availability or commercial potential of ARIAD's products and ARIAD's pipeline assets; and competitive developments.
Many of these factors are beyond Takeda's control. Unless otherwise required by applicable law, Takeda disclaims any intention or obligation to update forward-looking statements contained in this document as the result of new information or future events or developments.