Mass Layoffs Hit Ariad Employees After Takeda’s $5.2 Billion Buyout Deal
March 30, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Early in January, Takeda Pharmaceutical (TKPYY) acquired Cambridge, Mass.-based Ariad Pharmaceuticals (ARIA) for approximately $5.2 billion. As is often the case during acquisitions, there was concern about possible layoffs, but for the most part Takeda stayed silent on its severance plans.
However, the Boston Business Journal is reporting today that less than half of Ariad’s 300 employees will remain at that company. In other words, there are likely to be more than 150 job cuts.
The Ariad acquisition was completed on February 16.
Ariad has two targeted therapies that merge well with Takeda’s oncology portfolio. The biggest is Iclusig, which has been approved for chronic myeloid leukemia (CML) and a subset of acute lymphoblastic leukemia (ALL). Brigatinib, still in trials, has the potential to be approved in a genetically-defined subpopulation of non-small cell lung cancer (NSCLC). Brigatinib received Breakthrough Therapy designation from the U.S. Food and Drug Administration (FDA) in October 2014.
Takeda has several successful cancer drugs, including Adcetris (brentuximab vedotin), Ninlaro (ixazomib) and Velcade (bortezomib).
“We are very pleased to have completed the acquisition of Ariad Pharmaceuticals,” said Christophe Weber, president and chief executive officer of Takeda, in a statement. “The addition of Ariad’s innovative targeted therapies and research and development capabilities strengthens and diversifies our oncology business, positioning Takeda for sustainable long-term growth in this priority therapeutic area. We are particularly excited by the global potential of brigatinib, an investigational drug product, which we believe will become a best-in-class ALK inhibitor for non-small cell lung cancer with the potential to achieve peak annual sales of over $1 billion. We are also impressed with the swiftness and agility of Takeda and Ariad employees as they have planned for a successful integration while remaining focused on strategic goals.”
Takeda itself employs more than 2,000 people in Massachusetts.
The acquisition was completed through a tender offer and subsequent merger of Ariad with Kiku Merger Co., a wholly owned subsidiary of Takeda Pharmaceuticals USA. As a result, Ariad is an indirect wholly owned subsidiary of Takeda.
Takeda shares are currently trading for 5,344 Yen. That is equivalent to $480.06 (US).
Ariad was one of the companies spotlighted for price increases by U.S. Sen. Bernie Sanders during the U.S. presidential election. Sanders specifically noted Iclusig. Since its launch in 2012, the price for Iclusig rose 73 percent. Sanders said the price increase went from a monthly cost of $9,580 in 2012 to $16,560—a total price of $198,720 per patient annually.
In a January interview with Weber by Bloomberg, Weber said, “Takeda is very sensitive to price. We are focusing on making sure access is provided to patients for specialty drugs in the United States. We never increase price more than low single-digits in the United States. So that’s really the philosophy we will apply to any drug pricing. We don’t anticipate raising the price (of Iclusig).”
In terms of pricing for Brigatinib, he declined to even give a “ballpark” pricing, noting it would be a “global launch, not just a U.S. product launch.” Approval is expected by April 29.