Dublin-based Shire reportedly beat out several other companies interested in ViroPharma, including France’s Sanofi (NYSE: SNY). Shire is set to pay $50 a share, which would be a 27% premium on the closing price last week. Shire’s CEO, Dr. Flemming Ornskov, indicated that the ViroPharma acquisition is consistent with the company’s objective of strengthening its rare disease portfolio.
The Novartis sale comes as part of a broad review of operations following the departure of veteran chairman and former CEO Daniel Vasella. The company is looking to curb some of the $2.4 billion in R&D expenses is posted in the third quarter. That was a 10% year-over-year increase in R&D expenses in a disappointing quarter.
Novartis also announced last week it would cut 500 jobs in its international research centers, on the same day that Bristol-Myers Squibb Co. (NYSE: BMY) and Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) also announced layoffs. The CEO of Novartis, Joe Jimenez, said Monday that the company also would consider selling off its non-strategic animal health and over-the-counter (OTC) businesses if it cannot turn them into businesses on a global scale.
“We looked very hard at the market growth rates and at Novartis’s capabilities. These are good businesses, but we have to find a way to give them global scale,” Jimenez said.
As the health care industry continues to search for its new normal, many large drugmakers are shedding non-core activities while trying to bolster their new drug pipelines by snapping up smaller firms.