With the industry still recovering from the shock (although not wholly unexpected) of the "PfizerGan" collapse, the Baxalta/Shire combination, without doing anything, has come out somewhat stronger than previously. Shire & Baxalta, staying true to their word back in January is on track to completing the deal later this year.
I understand that businesses will always be businesses and they will always be aiming to increase their profits and margins. But in the Pharmaceutical industry, where the whole sector is bound by the simple premise that medication are created to combat and fight diseases, one should not be associating the sector with profits and margins so freely.
With the below statement issued by Shire that its rationale of the combination is to create a company focused on rare diseases rather than for tax reasons, it has to be said it is rather refreshing. Of course, only time will tell whether this deal follows through. Or at least, for the time being, there are hopefully brighter and bigger things to come for rare diseases.
“The combination of Shire and Baxalta is based on a strong strategic rationale to create the leading global biotechnology company focused on rare diseases,” it added. “The company currently expects to complete its proposed combination by mid-2016.” Shire's statement prompted a spike in Baxalta's share price yesterday and calmed investors jittery about the prospects for the deal, while Shire's stock fell and recovered over the course of the day. The company has said the post-merger firm will be able to deliver double-digit sales growth to more than $20bn by 2020, with around two-thirds of its turnover coming from the combined rare disease therapies portfolio.