LONDON • Danish drugmaker Novo Nordisk made its largest takeover offer ever - an unsolicited €2.6 billion (S$4.2 billion) bid for Belgium's Ablynx to beef up its lesser known blood-disorder unit and rekindle growth.
The offer for Ablynx signals a higher appetite for deals at the world's biggest maker of diabetes medicines.
A year after taking the reins, chief executive officer Lars Fruergaard Jorgensen is looking to expand beyond the field of diabetes and gain medicines that command high prices because they target rare diseases. One Ablynx treatment called caplacizumab is poised for approval this year for an unusual disorder in which blood clots form in small vessels throughout the body.
"The size of this transaction is of a larger magnitude than what we've done in the past decade," chief financial officer Jesper Brandgaard said in a phone interview. "It marks a higher risk willingness and a willingness to obtain innovation from outside Novo Nordisk."
Novo went public after Ablynx rejected a proposal that includes an upfront cash offer of €28 a share and potential cash payments over time of up to €2.50 per share tied to the success of two experimental medicines, the Bagsvaerd, Denmark-based drugmaker said in a statement yesterday. The maximum payment is 44 per cent more than the stock's closing price last Friday in Brussels.
Ablynx, whose stock has almost doubled since the beginning of last year, could be worth as much as €36 per share if all the outcomes included in the contingent value right that Novo offered are successful, according to analyst Peter Welford of Jefferies Group in London.
Mr Jorgensen presented the latest offer to Ablynx's board on Dec 22 last year, following a previously undisclosed €26.75-per-share bid earlier that month. He called his counterpart at Ablynx, Mr Edwin Moses, to try to start talks last Friday, and again the Belgian firm's board refused, according to Novo.
Novo may not be the only drugmaker interested in buying Ablynx. Bayer, Novartis, Shire and Sanofi all have assets that would make the Ghent, Belgium-based company a good fit, according to analysts at Credit Suisse.
GlaxoSmithKline also stated its desire to build new pipeline technologies for the future.
Ablynx's biggest shareholder, Aat van Herk, did not immediately return calls seeking comment. The Dutch millionaire saw his fortune boosted once before in a pharmaceutical takeover, when in 2011 he tendered his Crucell stake to Johnson & Johnson, which bought the firm for about US$2.4 billion.
The takeover proposal comes as Novo, the world's biggest maker of insulin, faces increased competition. Though the market for diabetes drugs is huge - around US$40 billion (S$53.3 billion) in sales - that has drawn a flood of similar treatments from the world's largest drugmakers, forcing them to compete on price for many older products. A new entry called Ozempic, approved by the US Food and Drug Administration last month, is expected to help.
Novo Nordisk shares have risen 32 per cent in the past year, valuing the company at 846 million kroner (S$181. 5 million).
Ablynx develops drugs from proteins known as nanobodies. Caplacizumab addresses the rare disorder called acquired thrombotic thrombocytopenic purpura, in which blood clots form in small blood vessels throughout the body. The illness can block the flow of blood to the body's organs, according to the US National Heart, Lung and Blood Institute.
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