The Australian at the centre of Takeda's deal for Shire

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An Australian played a key role in one of the largest pharmaceutical industry acquisitions in history.

Costa Saroukos, the global chief financial officer (CFO) of Takeda, spoke to PharmaDispatch on a recent trip to Australia during which he briefed investors on the company’s now completed US$62 billion acquisition of Shire.

“We are really pleased with the speed of the deal closing within eight months of the announcement," said Mr Saroukos.

"This included several important milestones, such as obtaining regulatory approvals ahead of plan, financing completed at highly competitive interest rates against a challenging market backdrop and listing on the New York Stock Exchange.

"Takeda will be the only pharmaceutical company in the world listed on both the Tokyo Stock Exchange and New York Stock Exchange.”

The acquisition has created a combined entity with annual revenues of around US$30 billion that comfortably positions it in the world’s top ten pharmaceutical companies.

“We briefed around 60 Australian institutions and super funds. The acquisition is the largest deal in the history of Japanese business and one of the largest in the world. I was impressed at how they quickly identified the strategy and opportunities.”

Mr Saroukos started his pharmaceutical industry career in Australia in 2000, as a tax manager at MSD, which was then based in the Sydney suburb of Granville.

“I was heading up tax in Australia for MSD and financial planning. I had a really down-to-earth conversation with the then finance director who convinced me to step out of my comfort zone and embark on an international assignment.”

Mr Saroukos subsequently progressed at MSD through a number of regional and global roles before joining Allergan in 2013 where he became CFO for the Asia Pacific (including China and Japan).

He has been out of Australia for 14 years but visits regularly for family and to reconnect with former industry colleagues.

He joined Takeda in 2015 as CFO for Europe and Canada before his appointment as the company’s global CFO in March last year.

“I saw what Takeda was doing under the leadership of CEO Christophe Weber and I was excited about his plan to truly globalise this Japanese pharmaceutical business.

“As a standalone business, around 34 per cent of Takeda revenue has been from the Japanese market, but this falls to 19 per cent with the Shire acquisition because of the increased international footprint, especially in the US.

“The acquisition seriously accelerates our strategy to become a truly global, values-based, R&D-driven biopharmaceutical leader.

“I now have an opportunity to be a CFO for a top-10 global pharmaceutical company and I can say it really is my dream job.”

Mr Saroukos continued, “We are a 237-year-old company and will never deviate from the value proposition: our focus on patients; trust; reputation; and, business.

“It is in that order and will not change. Our intention has been very clear from the onset that the Shire deal was only ever going to proceed as an acquisition, not a merger, and it is the Takeda values that will guide us as we integrate the two companies.

“Takeda’s long-term profitable growth will be driven by our R&D engine. This is focused on highly innovative medicines across the five key business areas of oncology, gastroenterology, neuroscience, rare disease and plasma-derived therapies, in addition to significant profitability growth and cash flow generation.”

Takeda announced the proposed acquisition of Shire just weeks after Mr Saroukos’ appointment as its global CFO.

He says the past eight months have been focused on “enabling the smooth acquisition of Shire” that includes Takeda listing on the New York Stock Exchange and the refinancing of almost US$31 billion in debt.

Takeda has announced plans to decrease the debt over time through cash flow generation and the divestment of non-core assets worth around US$10 billion.

 “The objective is to deleverage rapidly.

“We are currently about 4.8 times net debt-to-EBITDA ratio and we will get close to two times in the fourth year without divestitures. With divestitures, we will get down to 1.7 times in four years.

“We have criteria when it comes to the planned divestments. Number one – is it a non-core asset? Number two – if another company acquires the product, can they do a better job than we are today? Number three – is the sale price going to help us deleverage?”

On the integration of the two companies, Mr Saroukos said they have worked “hand-in-hand” with their Shire counterparts prior to deal close through a number of workstreams.

“We have been down to a level of granularity, to the extent we were permitted within the parameters of the UK takeover panel, on issues like identifying shared vendors and overall location strategies.

“In the end, it is really about executing our plans. From 8 January, we are one company, we have our plans already set and we start rolling up the financials again, look at the cost base and delivering on the potential synergies, whilst driving revenue and investment opportunities.

“The really important point is that, against the backdrop of this acquisition, our underlying business is delivering even better than our original guidance for the year. This strong momentum demonstrates our ability to deliver on the strategy.”