EU: Commission approves acquisition of Shire by Takeda, subject to conditions

The European Commission has approved under the EU Merger Regulation the acquisition of Shire by Takeda Pharmaceutical Company. The decision is conditional on the divestment of a biologic treatment product under development by Shire to treat inflammatory bowel disease.

Commissioner Margrethe Vestager, responsible for competition policy, said: “There are many diseases with only a limited number of effective and safe treatments. Inflammatory bowel disease is one such case. It is a lifelong condition with devastating effects on people’s lives. Therefore, it is essential that companies continue developing promising new products to treat it. We can today approve the merger between Shire and Takeda, but only subject to the divestment of the product that Shire is developing to treat the disease and which could have been lost through the merger. This will preserve innovation in this market and, importantly, increase the choice of treatments for patients.”

The Commission’s investigation focused on treatments for inflammatory bowel disease (IBD), and in particular on biologic treatments for the disease, where Shire’s and Takeda’s activities overlap.

IBD is a lifelong disease, with patients often being diagnosed at a young age. Conventional treatments, such as anti-inflammatory drugs and corticosteroids, have limited effect and patients are therefore prescribed biologic treatments when the disease becomes more severe.

Takeda already offers a biologic treatment for IBD, called Entyvio, which belongs to a class of biologic treatments called “anti-integrins”. This type of treatment has the advantage of being safer to use, by elderly or very young patients and patients with existing medical issues or that have reacted badly to medication in the past. For some IBD patients, anti-integrins are the only type of biologic that can be prescribed.

Shire is currently developing a biologic treatment belonging to the same class of biologics, anti-integrins. It would therefore be expected to compete closely with Entyvio once it reaches the market.

The Commission was concerned that the takeover, as originally notified, would lead to a loss of innovation and a reduction in potential future competition.

The Commission’s market investigation found that Takeda would be unlikely to continue developing Shire’s new anti-integrin treatment. This would have meant a serious loss of innovation on a market where patients currently have few treatment options available to them. It would have also prevented a product from reaching the market that could compete with Entyvio and reduce prices for this type of biologic treatment.

To address the Commission’s competition concerns, Takeda offered to divest Shire’s pipeline product that is expected to compete with Entyvio, including the rights to its development, manufacturing and marketing, to a purchaser that would have an incentive to develop the drug.

The Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns.