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Ablynx soars after rejects Novo Nordisk's $3.1 billion biotech bid


By Jacob Gronholt-and Robert-Jan Bartunek

COPENHAGEN/BRUSSELS (Reuters) - Denmark's Nordisk, the world's biggest insulin maker, went public with 2.6 billion euro ($3.1 billion) bid for Belgian group on Monday, seeking new source of growth by bolstering its treatments for

rejected Novo's latest takeover approach and analysts predict the Danish group, whose new is trying to expand by buying drugs developed by competitors, might face counterbidders and would need to raise its bid.

Shares in closed up 45 percent at 30.80 euros, above the 30.50 euros per share has offered. The bid represents 60 percent premium to the Belgian company's share price on Dec. 6, which was before Novo's first approach.

The unsolicited bid comes at time of renewed interest by large drugmakers in smaller firms, with U.S.-based clinching deal to buy for up to $7 billion on Sunday and Japan's agreeing last week to buy another Belgian group for $630 million.

said in statement that its board "unanimously concluded that the proposal fundamentally undervalues and its strong prospects for continued growth and value creation".

It later said that Peter Fellner, its since 2013, had decided to resign with immediate effect. It did not say why.

The Belgian group specialises in the research of novel drugs based on nano-bodies found in the of llamas and alpacas, for which it partners with several of the world's largest companies.

The main attraction for is Ablynx's experimental drug caplacizumab for the acquired thrombotic thrombocytopenic purpura, which would complement Novo's line-up of focused on

The $11 billion market is facing upheaval and stands to lose sales following approval of new

Biopharmaceutical treatments, led by haemophilia, make up around 20 percent of Novo's sales, with and products accounting for the remaining 80 percent.

"We have solid growth in our and business but we are struggling little bit to maintain the same level of growth momentum in biopharma," Novo's said.


The Danish company said it would pay 28.00 euros per share in cash for and an additional 2.50 euros in so-called contingent value right (CVR) if certain conditions related to other drugs in Ablynx's research portfolio were met.

An acquisition would be the first by Lars Fruergaard Jorgensen, who took over year ago. He has said the firm needs external innovation to broaden its product line-up.

Under previous Lars Rebien Sorensen, sat out spate of deal-making across the drugs industry and instead focused on its market-leading position making insulin and other treatments.

But in March, the company approached Global Blood Therapeutics, U.S. company focused on serious blood disorders, to discuss potential takeover, people familiar with the situation said.

Finance chief Brandgaard said the current bid could be revised if agreed to engage in talks.

"I think it would be natural to update the bid following detailed discussion with the board of directors of Ablynx," he said on conference call, adding that it would be premature to speculate on any increase.

Brandgaard also played down the threat of an interloper, saying: "In terms of counter proposals it is not our understanding that any other bidder is pursuing the target."


had already rejected an offer by the Danish group on Dec. 14 and said the new bid, made on Dec. 22, was some 14 percent higher.

"regrets that the board of directors of has so far declined to engage in any discussions, despite the proposals which have been put forward," it said in statement.

Analysts at Jefferies said they had fair value of at 29 euros per share, rising to 36 euros under long term upside scenario.

"We envisage needing to hike the offer and could see counterbids," the analysts said.

Tax breaks and other incentives have created thriving industry in Belgium, with many companies spun off from university projects now listed on its stock exchange.

Ablynx's shares have almost doubled in price in the past 12 months, buoyed by successful clinical trial data.

Its products, which are all still undergoing medical trials, target many such as rheumatoid arthritis, or

Evercore is advising Novo, while is working for

($1 = 0.8353 euros)

(Additional reporting by Stine Jacobsen in Copenhagen, Philip Blenkinsop in Brussels, Ben Hirschler in London and Abinaya Vijayaraghavan in Bengaluru; Editing by Keith Weir/David Evans/Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 23:30 IST