Shareholders question Shire TKT buy

The two companies have signed a definitive agreement under which Shire has agreed to acquire TKT. Shire will pay $37 in cash for each share of TKT common stock, or approximately $1.6 billion.

TKT currently sells Replagal (agalsidase alfa), its enzyme replacement therapy for the treatment of Fabry disease and intends to introduce Dynepo (epoetin delta), its gene- activated erythropoietin product for the treatment of anemia associated with renal disease, in the EU next year.

“This is an important and complementary acquisition that delivers on our strategy and brings to us a new, sustainable area of specialty pharmaceutical expertise in a market where there are only a small number of players,” said Shire CEO, Matthew Emmens. “We expect that TKT’s protein based drugs and clinical development pipeline based on a proven technology platform will enable us to diversify and broaden our revenue base, while continuing to grow our profits and further build our pipeline and platform for growth.”

Despite Emmens’ approval of the deal, Shire shareholder and chief investment officer of Britannic Asset Management, Peter Reid, is less enthusiastic. He is quoted by the Times Online as saying, “This is a bad deal…The group will spend its entire cash surplus on a loss-making US biotech company. This action would severely dilute the company’s earnings and is at total odds with the declared strategy of the management.”

Closing of the transaction is expected to be completed in the third quarter of 2005, subject to, among other things, regulatory clearance and stockholder approval.