Takeda to Acquire ARIAD Pharmaceuticals

Takeda Pharmaceutical Company Limited and ARIAD Pharmaceuticals have entered into a definitive agreement under which Takeda will acquire all of the outstanding shares in ARIAD for $24.00 per share in cash, or an enterprise value of approximately $5.2 billion. 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. Sarissa Capital, the holder of 6.6% of ARIAD’s common shares, as well as each of the members of ARIAD’s Board of Directors have agreed to tender their shares to Takeda pursuant to the offer.

"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," said Christophe Weber, president and chief executive officer of Takeda. "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."

Paris Panayiotopoulos, president and chief executive officer of ARIAD, said, "We are very pleased to combine with Takeda, which will allow us to not only accelerate our mission to discover, develop and deliver precision therapies to patients with rare cancers, but also deliver immediate and meaningful value to our shareholders through a substantial cash premium. This exciting transaction is a testament to the hard work and dedication of ARIAD’s talented team of employees. We have tremendous respect for Takeda, and I believe our shared commitment to innovation and research-driven cultures will provide for a smooth transition."

"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), NINLAROTM (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 synergies

Iclusig, 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.