Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229- 91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu.   EUROPEAN COMMISSION  
Brussels,  20.11.2018  
C(2018)  7858 fina l 
PUBLIC VERSION 
 
To the notifying party 
Subject : Case M. 8955 – TAKEDA/SHIRE  
Commission decision pursuant to Article 6(1)(b) in conjunction with 
Article 6(2) of Council Regulation No 139/20041 and Article 57 of the 
Agreement on the European Economic Area2 
 
Dear Sir or Madam,  
(1) On 2 8 September 2018, the European Commission (the “Commission”)  received 
notification of a proposed concentration pursuant to Article 4 of the Merger Regulation  
by which Takeda Pharmaceutical Company Limited ( "Takeda ") acquires control of Shire 
plc ( "Shire ") by way of purchase of shares  ("the Transaction") .3 Takeda and Shire are 
referred to hereinafter as the " Parties " and Takeda as the "Notifying Party" . 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the ' Merger Regulation '). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( 'TFEU ') has introduced certain changes, such as the replacement of 
'Community ' by 'Union ' and 'common market ' by 'internal market '. The terminology of the TFEU will be 
used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3  Publication  in the Official Journal of the European Union No C355, 4.10.2018, p. 8.  
In the published version of this decision, 
some information has been omitted pursuant 
to Article 17(2) of Council Regulation (EC) 
No 139/2004 concerning non -disclosure of 
business secrets and other  confidential 
information. The omissions are shown thus 
[…]. Where possible the information omitted 
has been replaced by ranges of figures or a 
general description.  
 
2 1. THE PARTIES  AND THE OPERATION  
(2) Takeda is a global pharmaceutical company , headquartered in Japan and traded on the 
Tokyo  stock exchange. Its four main therapeutic areas are: oncology, gastroenterology, 
neuroscience and vaccines.  
(3) Shire is a global biopharmaceutical company registered in Jersey. It is headquartered in 
Ireland and listed on the FTSE 100. It specialises in developing treatments for rare 
diseases across a range of therapeutic areas including immunology, haematology, 
neuroscience, gastroenterology, genetic diseases and ophthalmic . It recently sold its 
oncology business to Servier. 
(4) The Transaction was announced on 8 May 2018 and will be implemented by way of a 
purchase of shares.  Takeda will acquire the entire issued and to be issued ordinary share 
capital of Shire. The acquisition will be effected by means of a scheme of arrangement 
under Jersey Law, by which Takeda will acquire sole control of Shire. The Transaction 
therefore constitutes a concentration pursuant to Artic le 3(1)(b) of the Merger 
Regulation.  
2. UNION DIMENSION  
(5) The undertakings concerned have a combined aggregate world- wide turnover of more 
than EUR 5 000 million4 (Takeda: EUR  14 151  million, Shire: EUR  13 354 million). 
Each of them has EU -wide turnover in exc ess of EUR  250 million 
(Takeda:  EUR  […]  million, Shire: EUR  […]  million), but neither achieves more than 
two-thirds of its aggregate EU -wide turnover within one and the same Member State.  
(6) The notified operation therefore has a Union dimension pursuant to A rticle  1(2) of the 
Merger Regulation . 
3. THE PARTIES ’ ACTIVITIES  
(7) Takeda and Shire are similar sized, major global pharmaceutical companies. Their 
portfolios are predominantly complementary , both from a product and a geographic 
perspective: Shire is particularly focused on rare genetic diseases and immunology 
whilst Takeda is a major player in vaccines, oncology and gastroenterology. Similarly, 
Shire  has a strong presence in the US whilst Tak eda achieves a significant proportion of 
its revenue in Japan and in emerging markets.  
(8) The two main therapeutic areas where both companies are present are gastroenterology 
(GI) and neuroscience. Within GI, both Parties offer or are developing treatments for 
Crohn's disease (CD) and ulcerative colitis (UC)  (collectively referred to as 
inflammatory bowel disease (IBD)) , for chronic idiopathic constipation (CIC) and 
esophagitis. Affected markets arise within the first two of these areas: IBD and CIC.5 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission  
Consolidated Jurisdictional Notice (OJ C  95, 16.4.2008, p . 1).  
5  Although Takeda offers a number of treatments for esophagitis, and Shire has a pipeline in this area, no 
affected market arises as the Parties' respective products are for different types of esophagitis and belong to 
 
 
3 Within n euroscience, the Parties are neither currently offering nor developing treatments 
for the same disease areas.6 The Parties' activities do not overlap in any other areas.7  
4. COMPETITIVE ASSESSMENT  
4.1. Product market definition  
4.1.1. Treatments for inflammatory bowel disease (IBD)  
(9) Takeda and Shire both offer treatments for inflammatory bowel disease (IBD). As 
explained below in more detail, the standard treatment approach for inflammatory bowel 
disease consists of three lines of treatment. Both Parties market mesalazine , a first line 
treatment indicated for use in mild to moderate ulcerative colitis ( […]*), under the 
respective brand names Asacol/Mesavancol (Takeda) and Mezavant (Shire). Takeda also 
offers a third line treatment, vedolizumab, under the brand na me Entyvio, which is 
indicated for use in […] ** ulcerative colitis (UC) and Crohn's disease (CD). Shire has a 
treatment currently under development (in Phase III clinical trials) for which it is 
targeting the same indication: use in […] ** ulcerative colitis (UC) and Crohn's 
disease (CD).  
(10) Crohn's disease (CD) and ulcerative colitis (UC) are inflammatory diseases that affect 
the digestive system. They typically first occur in relatively young patients and are 
lifelong conditions, there being no treatment avai lable which actually cures the disease. 
The cause of both diseases is unknown. 
(11) The main difference between UC and CD is that CD can affect any part of the GI tract 
whereas UC is limited to the colon. Similarly, CD affects the full thickness of the 
intestin al wall whereas the inflammation caused by UC remains within the superficial 
lining of the intestine. Doctors emphasise, however, that both diseases can have similarly 
debilitating effects.   
                                                                                                                                                         
different classes in the EphMRA classif ication, even at ATC3 level, the broadest plausible market normally 
considered by the Commission. Takeda's marketed products (which are all classified in ATC3 category A2B 
(anti-ulcerants)) are used predominantly for the treatment of erosive esophagitis and reflux disease. Shire's 
Phase III pipeline is likely to be indicated for use in eosinophilic esophagitis (EoE), and is expected to be 
approved under ATC class […].  
6  Takeda is developing a new treatment for narcolepsy (TAK -925) based on an orexin 2 rece ptor agonist. This 
treatment, which is currently in Phase I trials, […] . There is technically a minor overlap in potential usage 
with a product based on methylphenidate that Shire currently markets under the brand name Equasym. 
Shire's drug is used to a  limited extent off -label for narcolepsy in some EEA countries (its indication being 
for ADHD). The Commission's investigation confirmed that use of methylphenidate in treating narcolepsy is 
very limited and that where methylphenidate is prescribed, other brands are preferred over Equasym (see 
also Case M. 6258 – Teva/Cephalon, Commission decision of 13 October 2011) . Furthermore, 
methylphenidate belongs to ATC class N6B whilst Takeda's pipeline TAK -925 is expected to be approved 
under class […].  
7  The Transaction creates a theoretical vertical link as Takeda produces and supplies a haemostatic patch and 
Shire  offers CMO  servic es related to such products to one  third party . Shire is not, however, generally active 
as a CMO and […] . There is therefore no meaningf ul vertical relation between the Parties' activities.  
* Should read “UC”.  
** Should read “moderate to severe”.  
 
4 (12) The European Crohn's and Colitis Organisation (ECCO) distinguish  three levels of 
disease severity for each of UC and CD: mild, moderate and severe.  
(13) Treatments for UC and CD are usually indicated as being for either mild -to-moderate 
levels of the disease or moderate -to-severe. The treatments for mild -to-moderate UC and 
CD (also termed conventional treatments) include amino salicylates (5 -ASAs), 
corticosteroids, immunosuppressants and antibiotics. Once the disease has progressed to 
a moderate -to-severe stage, biologic drugs would then be prescribed with the aim of 
inducing remission.  
(14) UC and CD are both characterised by phases of remission and relapse. Although three 
lines of treatment are generally identified (usually first line: 5 -ASAs or corticosteroids, 
second line: corticosteroids or immunosuppressants, and third line:  biologics) patients 
may also be switched back from biologics to immunosuppressants to maintain remission.  
(15) Within biologic (third line treatment), patients are also often prescribed different 
biologics in succession (usually termed first line biologic, sec ond line biologic etc.). This 
is most often either because the first line biologic loses efficacy after a certain time or for 
reasons related to safety and side effects.  
(16) The general pattern of treatment for UC and CD is similar, but there are some 
differen ces, as some treatments are only indicated for one or the other disease. In 
particular, mesalazine (a type of 5 -ASA) is the standard first -line treatment for UC but is 
not indicated for CD (although there is thought to be some off -label usage).  
4.1.1.1. Separate m arkets for mesalazine  and biologics  
(17) In case M.7339 Abbvie/Shire,8 the Commission concluded that mesalazine  (a type of 
5-ASA) and Humira (a biologic agent) belonged to separate markets, primarily because 
they form part of different lines of treatment and are not substitutable from either a 
demand or a supply perspective.  
(18) The distinction between conventional treatments for mild -to-moderate UC and CD and 
biologic treatments for moderate -to-severe stages of the diseases appears to be well 
established in the literature, and features in particular in the treatment guidelines issued 
by the European Crohn's and Colitis Organisation (ECCO). 
(19) In general terms, clinical guidelines recommend a phased treatment for UC and CD, 
consisting  of at least three lines of treatment. The  first-line treatment for UC involves a  
conventional therapy such as amino salicylates (which include mesalazine ); this would 
then be followed in second line by  a corticosteroid and then potentially an 
immunosuppre ssant; the third -line treatment, which is initiated when the disease 
symptoms progress due to a lack of response to conventional therapies, would involve a  
biologic drug, such as vedolizumab. The standard recommended treatment sequence for 
CD is slightly d ifferent as mesalazine  is not indicated for this condition, meaning that 
corticosteroids may be prescribed in first line, followed by immunosuppressants in 
second line and biologics in third line.   
                                                 
8  Case M.7339 Abbvie/Shire , Commission decision of 16 October 2014.  
 
5 (20) Clinical guidelines, in particular the ECCO guidelines me ntioned above, recommend 
using mesalazine  as a first -line treatment for ulcerative colitis (UC). Responses to the  
market investigation from key opinion leaders (KOLs)9 confirmed that mesalazine  is a 
standard first line treatment for mild -to-moderate UC, both as an induction therapy (i.e. 
for inducing remission in mild flare) and as a maintenance therapy.10 One KOL 
explained, for example, that " a patient presenting a mild case of UC would almost 
always be prescribed mesalazine as a first line of treatment ".11 
(21) There is evidence to suggest that mesalazine  may also be prescribed by some doctors as 
a first -line treatment for Crohn's disease (CD),12 although it is not indicated  for this 
condition and expe rts in the field generally consider it to be ineffective in treating CD.13 
(22) The results of the market investigation clearly indicated that, in accordance with the 
ECCO treatment guidelines, biologics are used in moderate to severe stages of UC and 
CD, thus distinguishing them from mesalazine .14  
(23) In addition, t he respective modes of action of mesalazine  and biologics  are quite 
different . Mesalazine  is a type of  amino salicylate cont aining 5 -aminosalicylic acid 
(5-ASA). It works by reducing inflammation on the wall of the intestine and as such has 
a predominantly topical action. Mesalazine  is generally very well tolerated as it acts 
locally and has low toxicity.  Different classes of biologic treatment have different  modes 
of action but they have in common the fact that they target the cause of the 
inflammation, e.g. by suppressing the immune response directly or blocking the 
pathways that would usually lead to an immune response. Biologics therefore address the 
disease in a more fundamental way than mesalazine , which simply treats the symptoms 
topically . 
(24) The mode of administration of mesalazine  is also different from that of biologics. 
Mesalazine  is administered either orally or rectally whereas biologics are availabl e as 
either intravenous or subcutaneous formulations, and are therefore often adm inistered in 
a hospital setting.  The results of the market investigation confirmed that m esalazine  is 
normally distributed through retail pharmacies for patients to take at home .15 This means 
that the main purchasers of biologics are hospitals whereas mesalazine  is predominantly 
purchased by retail pharmacies.  
(25) In view of the above findings, the Commission concludes that mesalazine  and biologics  
do not belong to the same produc t market, given the difference in their respective mode 
of action, their uses in different lines of treatment, and the difference in purchasing and 
prescribing settings. This is consistent with the Commission's conclusion in case 
                                                 
9  The KOLs contacted during  the Commission's market investigation are leading experts  in the treatment of 
gastrointestinal diseases , and recognised figures in the European medical community . 
10  Questionnaire 2 to physicians, Q3.1 and Q4.  
11  Minutes of teleconference call with KOL in gastroenterology, 7 August 2018, 8.00.  
12  Questionnaire 3 to pharmacies and hospitals, Q4.  
13  Minutes of teleconference call with KOL in gastroenterology, 15 October 2018, 13.30. Minutes of 
teleconference call with KOL in gastroenterology, 9 August 2018, 12.00.  
14  Questionnaire 2 to physicians, Q9 .1. Minutes of teleconference call with KOL in gastroenterology, 
7 August  2018, 8.00.  
15  Questionnaire 3 to pharmacies and hospitals, Q3.1, Q17.  
 
6 M.7339 Abbvie/Shire, in which mesalazine  and biologic s were considered to be in 
separate markets.   
4.1.1.2. Mesalazine  
(26) The Commission has not previously defined a specific market including mesalazine . As 
explained in Section 4.1.1.1, i n case M.7339 Abbvie/Shire, the Commission concluded 
that mesalazine  (a type of 5 -ASA) and Humira (a biologic agent) belonged to separate 
markets, meaning that it would not be appropriate to define a  market including 
mesalazine at the level of the ATC3 class (which in this case would be ATC A7E "IBD 
products").  
(27) In line with the  Commission's standard practice in cases involving pharmaceutical 
products, the market for mesalazine -based drugs could therefore either  be defined at the 
molecule level,  i.e. a market for mesalazine  only, or at the level of the  ATC4 class, 
which  would be ATC A7E1 "intest inal amino salicylate products".  This market would 
include , in addition to mesalazine , sulfasalazine , balsalazide  and olsalazine .  
(28) The Notifying Party  submit s that the appropriate market definition comprises all 
conventional treatments for mild to moderate UC and CD, including at least the other 
pharma ceuticals included in the ATC4 class A7E1 (sulfasalazine , balsalazide and 
olsalazine ) and the ATC4 class A7E2 (corticosteroids) . 
(29) The m arket investigation confirmed that mesalazine  is the standard first line treatment in 
UC. When asked to name alternatives  to mesalazine , doctors  tended to name  those 
products currently used after mesalazine  (i.e. second- line treatments ) rather than other 
5-ASAs .16 The very fact that these treatments are currently recommended to be used in 
second line, rather than first line, in clinical guidelines, indicates that they are not direct 
substitutes for mesalazine . They have different modes of action and often a less good 
safety profile compared to mesalazine .  
(30) For the purposes of this case, it is not necessary to determine the exact  scope of the 
product market concerning  mesalazine -based drugs as , in all plausible  markets , including 
the narrowest plausible market , which would be the market  restricted to the mesalazine  
molecule  only , no competition concerns  would arise .  
4.1.1.3. Anti-integrins for use in treating UC and CD  
(31) Apart from the decision in case  M.7339 Abbvie/Shire , which did not deal specifically 
with vedolizumab, there are no other past Commission cases in which a market for 
biologics for use in CD and UC has been assessed. 
(32) The Notifying Party submits  that the correct market definition includes all biologic s and 
small molecule agents for the treatment of UC and CD, as the same group of patients 
could be prescribed any of these treatments. Whilst acknowledging that the different 
biologic treatments have different modes of action, and that some are more commonl y 
used as first line biologic and others as second or third line, the Notifying Party  
nonetheless claim s that this choice is "fluid" and that it therefore would not be 
                                                 
16  Questionnaire 1 to physicians, Q7.  
 
7 appropriate to define markets for the different lines of treatment or different classes of 
biologic s.  
(33) There are, however, in the Commission's view, a number of reasons for considering that 
it may be appropriate to define a narrow er market for the group of biologics of the same 
type as vedolizumab, this being a market for anti -integrins.  
(34) The biologic treatments currently available for UC and CD can be categorised into three 
main groups, on the basis of their mode of action. These are: ( i) anti- TNFs: adalimumab, 
infliximab  and golimumab; (ii) anti-integrins: vedolizumab17; and ( iii) IL inhibitor s (or 
anti-ILs): ustekinumab (an anti -IL23).  
(35) Anti-TNFs target and suppress a protein called the tumour necrosis factor ( TNF ), which 
is part of the inflammatory response. The TNF -α cell signalling protein (cytokine) 
activates inflammatory transcription factors which regulate inflammatory response and, 
as a result, lead to chronic inflammation in IBD. The activation of these transcription 
factors stimulates the production of pro- inflammatory cytokines and the mobilisation of 
inflammatory cells. Anti -TNFs bind to TNF -α and, thereby, interrupt the inflammatory 
response.  
(36) Anti-integrins reduce inflammatory activity by binding integrins (transmembrane 
receptors that facilitate cell -extracellular adhesion), and, thereby, blocking them from 
inflamed tissue. Vedol izumab in particular binds to the α4β7 integrin on white blood 
cells called lymphocytes. These cells are prevented from binding to a molecule found in 
the lining of the gut and thus reduce inflammation. 
(37) IL inhibitors are immunosuppressive agents which inhi bit the action of interleukins 
(signalling proteins that are synthesised by lymphocytes, monocytes, macrophages  and 
certain other cells). Interleukins play a role in the regulation of the immune system. IL 
inhibitors work by preventing the sub-unit of the interleukin from binding to a receptor 
protein on the surface of the immune cells. They thus interrupt  the signalling pathways 
that cause the immune reaction (and thus inflammation) in IBD . 
(38) These three types of biologic s, whilst all serving to reduce infla mmation in IBD, 
therefore have clearly distinct modes of action. Moreover, there are a number of specific 
differences which set anti -integrins apart from both anti- TNFs and IL inhibitors, which 
have implications for prescribing practice and are therefore i mportant to consider in the 
context of product market definition. 
(39) First, anti- TNFs and IL inhibitors suppress the immune system generally, whilst anti-
integrins act specifically on the gut wall  as they prevent  the trafficking of lymphocytes to 
this area. T his means that anti -integrins  reduce  the inflammation in the gut, without 
causing  a general immunosuppressant effect.  Anti-TNFs and IL inhibitors, meanwhile,  
reduce the inflammation on the gut wall by suppressing the immune system. This has the 
side effect of increasing the risk that the patient contracts other, sometimes very serious, 
infections. As a result, anti -integrins have a much better safety profile than other 
biologics , as confirmed by the results of the market investigation .18 A KOL exp lained, 
                                                 
17  Marketed by Takeda under the brand name Entyvio.  
18  Questionnaire 1 to  physicians, Q27.1 and Q27.2. Questionnaire 2 to competitors, Q16.1 and Q16.2.  
 
8 for example, that "vedolizumab …. does not affect the immune cell trafficking elsewhere 
in the body, e.g. in the brain or lungs. As a result, there is no risk of patients developing 
pneumonia or other such conditions …. Entyvio has an advantage from a safety 
perspective, and equal efficacy."19 
(40) Furthermore, KOLs  confirmed that the superior safety profile of Entyvio, as an anti -
integrin,  relative to other biologics has a strong influence on their prescribing choices. In 
particular, Entyvio can be used in various groups of patients for whom other biologics 
would not be suitable, including elderly people, very young patients, pregnant women , 
patients with previous or existing comorbidities (such as infections or cancer), and 
patients that have had problem s with tolerance of other treatments in the past.20 
(41) A leading physician in the filed explained that "Entyvio is particularly suitable for use in 
older patients or those with comorbidities, where it is important not to suppress the 
immune system. When a pati ent has suffered with side effects from treatments given in 
the past or has had cancer, the treatment should be as gut -selective as possible, and 
Entyvio is therefore the ideal choice. "21 
(42) The importance of the superior safety profile of anti -TNFs is also reflected in the fact 
that Entyvio is increasingly being used as a first -line biologic, not only in the specific 
groups of patients for which other biologics are not an alternative, but als o more 
generally. Having been launched after anti -TNFs, Entyvio had traditionally been seen as 
an alternative biologic to be used when a patient loses response to anti -TNFs (which 
occurs very often). More recently, however, […]22 and doctors also confirmed that it is 
increasingly chosen as the first biologic to be prescribed, in particular in UC, as it offers 
equivalent efficacy to anti- TNFs combined with lower risks of infection and other side 
effects.23 
(43) Responses to the market investigation indicated more g enerally that anti -integrins are 
used in different circumstances and are chosen for different reasons relative to other 
biologics, in particular anti -TNFs. A nti-TNFs have a quick onset of action and would  
therefore be preferred (other things being equal) w hen a severe form of the disease needs 
to be brought under control  quickly . Similarly, if a patient is suffering from extra -
intestinal symptoms, such as arthritis or skin conditions, then the more general 
immunosuppressant effect of anti -TNFs would be an a dvantage, as the same treatment 
would address the different symptoms.24 
(44) Similarly, although IL inhibitors (specifically Stelara, the one IL inhibitor currently 
available, and which is only indicated for CD ) are considered to have a slightly better 
safety pr ofile than anti -TNFs, they nonetheless have a general immunosuppressant 
effect, and do not therefore offer the same advantages in terms of safety as anti -integrins. 
A leading expert in the field confirmed that, as a result, ustekinumab  is more similar  to 
                                                 
19  Minutes of teleconference with KOL, specialist in gastroenterology, 9 August 2018 12.00.  
20  Questionnaire 1 to physicians, Q24, Q25, Q27. Minutes of teleconference with KOL, specialist in 
gastroenterology, 7 August 2018 8.00.  
21  Minutes of teleconference with KOL, specialist in gastroenterology, 15 October 2018 13.30.  
22  [Information on Takeda’s internal documents] . 
23  Questionnaire 1 to physicians, Q17.  
24  Minutes of teleconf erence with KOL, specialist in gastroenterology, 15 October 2018 1:30pm.  
 
9 anti-TNF s than to Entyvio, and is used in the same type of patients, for example those 
suffering psoriasis or arthritis in addition to IBD .25 
(45) In addition to the three types of biologic treatments described above, a number of small 
molecules are also currently unde r development for the treatment  of moderate to severe 
CD and UC. In particular, one small molecule developed by Pfizer  (tofacitinib , a JAK 
inhibitor) is expected to soon become  available for the treatment of UC . One of  the 
differences  between  small molecules and biologic agents is the route  of administration: 
while, as already explained, biologic agents are administrated either  intravenous ly or in 
subcutaneous form, small molecules are taken orally. Although small molecule such as 
JAK inhibito rs are not yet available on the market and thus their characteristics, 
including efficacy, cannot be fully assessed, doctors that responded  to the market 
investigation indicated that these molecules  are expected to have a poorer  safety profile 
compared to gut-selective treatments such as anti -integrins .26 As explained by the 
Notifying Party in the Form CO, […] .27 
(46) The specificity of anti -integrins (and, at present, Entyvio, as the only anti -integrin 
currently available on the market) is also confirmed by purchasing patterns. Information 
submitted by the Notifying Party […] . This is confirmed by the results of the ma rket 
investigation,28 which also indicated that anti -TNFs are frequently sourced through 
tender procedures.29 The fact that Entyvio is not included in tenders alongside anti -TNFs 
is consistent with the finding that it is not substitutable in use, and that ho spitals 
therefore require Entyvio to be purchased without reference to the price of anti -TNFs, as 
this class of biologics would often not constitute a suitable alternative for physicians.  
(47) This is further confirmed by evidence suggesting that anti -TNFs exer t little if any  price 
pressure on Entyvio. The first infliximab  biosimilars were introduced in the EEA after 
the reference medicine Remicade lost exclusivity in most EEA countries in 2015. T here 
are now four such biosimilars approved in the EEA . The result s of the market 
investigation indicated that, contrary to the Notifying Party's claims, the introduction of 
these biosimilars at a lower price compared to the anti- TNF originator Remicade, has 
had no or only very minimal effect on the price of Entyvio, whi lst the price of Remicade 
itself has fallen considerably.30 In particular, the majority of hospital purchasers 
confirmed that the price of Remicade had decreased since the introduction of biosimilars 
to infliximab, with a significant number observing dramat ic drops. One hospital noted, 
for example, that " the price of Remicade has been approximately divided by three during 
the last three years ".31 Competitors expressed very similar views, with one stating, for 
example, that " it decreased the overall value of the infliximab market by 60% ".32 Only a 
much smaller proportion of competitors considered the introduction of infliximab 
biosimilars to have had an effect on the prices of other anti -TNFs, and this would appear 
                                                 
25  Minutes of teleconference with KOL, specialist in gastroenterology, 15 October 2018 1:30pm.  
26  Minutes of teleconference with KOL, specialist in gastroenterology, 15 October 2018 1:30pm.  
27  Form CO, paragraph 219.  
28  Questionnaire 3 to hospitals and pharmacies, Q16.  
29  Questionnaire 3 to hospitals and pharmacies, Q14.  
30  Questionnaire 1 to physicians, Q36. Questionnaire 3 to pharmacies, Q24. Minutes of teleconference with 
KOL in gastroenterology, 9 August 2018 12.00.  
31  Questionnaire 3 to hospitals and pharmacies, Q24.1.  
32  Questionnaire 2 to competitors, Q21.1.  
 
10 to depend very much on the specific tendering systems in different competitor. One 
competitor explained: "In some countries, the entry of biosimilars has also led to 
decreases in the prices of other anti -TNFs, such as Humira and Simponi, however, the 
decrease in prices has been to a lesser extent than  the decrease in the price of 
Remicade."33 The vast majority of both competitors and hospitals did not consider the 
introduction of infliximab biosimilars to have had any effect on the pricing of Entyvio.34 
This indicates that biosimilars to anti- TNFs exert competitive pressure on the originator, 
and potentially on other anti -TNFs, but do not appear to compete with Entyvio, 
suggesting again that they do not form part of the same product market.   
(48) Lastly, [information related to Takeda’s internal documents] .35  
(49) For the reasons presented above, the Commission c onclude s that there  are strong 
indications that the appropriate  market definition  would be limited to anti -integrins  for 
use in UC and CD . For the purpose s of this Decision, it is not necessary  to take a view as 
to whether a  distinction should be made  between anti -integrins for use in UC and anti -
integrins for use in CD, since Takeda's market ed product is indicated, and Shire's 
pipeline is being developed,  for both conditions . The Commission the refore concludes 
that, for the purpose of this Decision, the market for anti -integrins for use in UC and CD  
is the relevant market  to be considered.  
4.1.2. Treatments for chronic idiopathic constipation (CIC)  
(50) CIC is a chronic motility disorder that typically affe cts women and older people. The 
main symptoms of the disease are infrequent stools, which are often  difficult to pass, but 
the underlying cause is unknown.  
(51) The standard treatment  for CIC is  over-the-counter (OTC) laxatives , followed by 
prescription laxatives if these are not effective.  The effectiveness of these treatments is 
limited, and they are currently only indicated for use in women.  
(52) The EphMRA classification  groups all laxatives together at ATC3 level (under A6A 
"drugs for constipation") . Different types of laxative are then classified at ATC4 level, 
with A6A9 "other drugs for constipation" covering all products that do not fall into one 
of the other specific categories.  
(53) In its most recent case involving treatments for constipation, M.7919 Sanofi/Boe hringer 
Ingelheim Consumer Healthcare Business, the Commission concluded that the market 
should be assessed at the ATC3 level (i.e. all types of laxative) but left open whether a 
distinction should be made between OTC and prescription products. It should a lso be 
noted that no reference was made in that case to the class A6A9, the ATC4 class to 
which the products in question in this case belong. In another recent case, 
M.7379 Mylan/Abbott EPD -DM, the Commission did not exclude that the appropriate 
market may  be defined at ATC4 level (in that case, A6A6 osmotic laxatives).    
                                                 
33  Questionnaire 2 to competitors, Q21.2.  
34  Questionnaire 2 to competitors, Q21.3. Q uestionnaire 3 to hospitals and p harmacies, Q24.3.  
35  [Information related to Takeda’s internal documents].  
 
11 (54) The Notifying  Party submits that the appropriate market definition in this area would 
encompass all treatments for constipation, i.e. the entire ATC3 class A6A, on the basis of 
the argumen t that the different classes of laxative can be used as substitutes for one 
another.  
(55) For the purposes of this case, the Commission can leave the exact product market 
definition open, as the T ransaction is unlikely to  create competition concerns in relation  
to treatments for CIC under any plausible product market definition.   
4.2. Geographic market definition  
(56) The Commission has consistently considered the markets for prescription 
pharmaceuticals to be  national in scope.36 For pipeline products, the Commission has  
considered the geographic scope of the market to be  at least EEA -wide.37 There would 
appear to be no reason to depart from this practice in the current case.  
4.2.1. Treatments for inflammatory bowel disease (IBD)  
4.2.1.1. Markets including mesalazine  
(57) In accordance with th e Commission's practice, as referred to above, the various plausible 
markets including mesalazine  will be assessed at national level, as both Parties have 
marketed products of this type.  
4.2.1.2. A market for anti-integrins  for use in treating UC and CD  
(58) In accordance with the Commission's practice, as referred to above, the market for anti -
integrins will be assessed at EEA level, in view of the fact that the horizontal overlap 
involves a pipeline product. 
4.2.1.3. Treatments for chronic idiopathic constipation (CIC)  
(59) In accordance with the Commission's practice, as referred to above, the various plausible 
markets for treatments for CIC  will be assessed at national level, as both Parties have 
marketed products of this type.  
                                                 
36  See, for example, M.8675 CVC/Teva's Women's Health Business, 20 December 2017, M.7559 
Pfizer/Hospira, 4 August 2015.  
37  See, for example, M. 8401 J&J/Actelion, 9 June 2017, M.7872 Novartis/GSK (Ofatumumab outoimmune 
indications), 18 December 2015.  
 
12 4.3. Competitive analysis  
4.3.1. Treatments for inflammatory bowel disease (IBD)  
4.3.1.1. Mesalazine  
(60) The only geographic market in which the T ransaction would create an affected market 
for mesalazine  (or any possible wider marketed including mesalazine ) is the Netherlands. 
The table below shows the market shares on the narrowest possible basis, i.e. a market 
for mesalazine -based treatments.  
Table 2 : Market shares for mesalazine  for use in UC and CD, 2015- 201738 
 2015  2016  2017  
 Volume  Value  Volume  Value  Volume  Value  
Takeda 
(Asacol)  [5-10]% [5-10]% [5-10]% [5-10]% [5-10]% [5-10]% 
Shire 
(Mezavant)  [10-20]% [10-20]% [10-20]% [10-20]% [10-20]% [10-20]% 
Combined  [20-30]% [20-30]% [20-30]% [20-30]% [20-30]% [20-30]% 
Ferring 
(Pentasa)  [40-50]% [40-50]% [40-50]% [40-50]% [40-50]% [40-50]% 
Dr Falk 
(Salofalk)  [30-40]% [30-40]% [30-40]% [30-40]% [30-40]% [30-40]% 
(61) As can be seen from the table above, the merged entity would be the third largest 
supplier of mesalazine  in the Netherlands (as Shire is today), and would face competition 
from Ferring (the market leader with […]  [40-50]% market share) and Dr  Falk (with 
[30-40]% market share) , in addition to at least four  suppliers of generic mesalazine  
products that are not  captured in the above market shares , but which also exert an 
effective competitive constraint on the Parties.39 It is therefore  most  likely that the above 
figures overestimate the Parties' position on this market.  
(62) The Notifying Party submits  that Asacol is […] . Although these do not appear  in the 
market shares  (as explained above) , the Notifying Party  also points out  that generic 
mesalazine  products are available and exert considerable competitive pressure. Lastly, 
the Notifying Party submits  that there is no particular closeness of competition between 
Takeda and Shire's products: Takeda's product (similarly to the Ferring and Dr Falk 
products) is taken three to four times a day whereas Shire's product has a delayed action 
mechanism and can be  taken once a day only.  
(63) The market investigation results confirmed that Ferring and Dr Falk, as suggested by the 
market shares, are generally considered to be the top suppliers of mesalazine  in the 
Netherlands . Shire is generally named as a […]  choice and  only one competitor 
                                                 
38  Market shares were also provided for each of  UC and CD separately . These are very similar to those for the 
two diseases together. The highest combined market share over a three year per iod is [20 -30]% in CD, in 
value terms, in 2015.  
39  The Notifying Party explained that there are no data available including all mesalazine  products (i.e. both 
branded and generic) but restricted to sales for use in UC and CD. Data including generic product s also 
includes sales for use in other diseases. Sales volumes suggest, however, that use in UC and CD accounts for 
a significant part of mesalazine  use. Considering, for comparison purposes, all sales of mesalazine  in the 
Netherlands – both branded and generic, for all diseases –  the Parties' sales accounted for […] [10 -20]% of 
the total in 2017.  
 
13 mention ed Takeda amongst the top suppliers .40 Although Shire and Takeda's products 
are similar to each other, in that they are both available as tablets whereas Ferring and Dr 
Falk's products are granules,41 this does not appear to make them particularly close 
competitors , as it is not a decisive factor in doctors' choices . One physician explained, 
for example that " [t]here is little clinically relevant difference between the mesalazine 
delivery systems ".42 In general, both physicians  and competitors  generally considered 
there to be relatively little differentiation between the different brands of mesalazine  
available.43 A competitor offering a generic mesalazine  in the Netherlands explained , for 
example,  that "[b] ased on the scientific  evidence available, there does not appear to be 
clinically relevant differences in efficacy or safety among the various mesalazine 
formulations and dosing regimens."44 No market participants expressed concerns as to 
any potential consequences of the T ransaction on a possible market for mesalazine  in the 
Netherlands, or any wider market including mesalazine .  
(64) Given the Parties' relatively modest combined market share ( which never exceeds 
[20-30]%45, but is most likely overestimated as does not take into account the generics 
competitors ), and the presence of strong competitors whose products appear to be 
preferred to those of the Parties,  the Commission concludes that the T ransaction does not 
raise serious doubts  as to its compatibility with the internal market on any plausible 
market including mesalazine  in the Netherlands . 
4.3.1.2. A market for anti -integrins for use in treating UC and CD  
(65) Takeda's marketed product  Entyvio would currently have 100% market share  on any 
national market for anti -integrins  in the EEA , it being the only biologic of this kind 
currently indicated for use in UC and CD in th is region .  
(66) Shire is developing one of two anti -integrins currently in clinical trials, the other being 
owned by Roche. Shire's  pipeline product, like Roche's, is currently in Phase III clinical 
trials.  The three products – Takeda's marketed product Entyvio and the two pipelines 
owned by Shire and Roche respectively –  all belong to the class of anti- integrins, but are 
three different molecules: ( i) Entyvio:  vedolizumab; (ii) Shire's pipeline (SHP647) : anti-
MAdCAM -1; and (iii) Roche's pipeline: etrolizuma b. The exact mode of action of the 
three molecules  is slightly different but the overall effect in each case is to prevent the 
trafficking of lymphocytes to the intestinal wall.46  
                                                 
40  Questionnaire 2 to competitors, Q5.  
41  Questionnaire 2 to competitors, Q6 and Q7.  
42  Questionnaire 1 to physicians, Q 21. 
43  Questionnaire 1 to physicians, Q21, Q22. Questionnaire 2 to competitors, Q7.  
44  Questionnaire 2 to competitors, Q7.  
45  Market shares were also provided for each of  UC and CD separately . These are very similar to those for the 
two diseases together.  The highest combined market share over a three year period is [20 -30]% in CD, in 
value terms, in 2015.  
46  The three molecules each block  the binding of the integrin to its receptor in a slightly different way : 
vedolizumab targets the α4β7 integrin and pre vents it from binding to its receptor, the MAdCAM molecule; 
etrolizumab  targets both the β7 subunit of α4β7, and αEβ7; anti -MAdCAM -1 targets the MAdCAM antigen 
which in turn prevents the binding of MAdCAM to α4β7.  
 
14 (67) The overriding similarity in the mode of action of these three molecules therefore sets 
them apart from all other biologic treatments, as they are all gut -specific and do not have 
the general immunosuppr essant effect characteristic of other classes of biologics . 
The Notifying Party's view  
(68) The Notifying Party submits  that the market -to-pipeline overlap between Takeda and 
Shire’s products would not have any significant effect on this market due to the high 
general level of competition and […] .  
(69) In particular,  the Notifying Party  argue s that […] .  
(70) In addition, the Notifying Party  maintains  that, even were Shire's SHP647 to be 
approved, it would be the third anti -integrin to reach the market after Roche’s 
etrolizumab, and that the treatment landscape would be very competitive.  
(71) In this regard, the Notifying Party also submits that a significant number of other 
pipelines may reach the market in the intervening period, with a range of modes of 
action . These include  small molecule agents that have the added advantage of being 
administered orally. Similarly, the Notifying Party emphasises that an increasing number 
of existing treatments are losing exclusivity and that adalimumab biosimilars (the first of 
which is due to be launched later this year) […] . The Notifying Party maintains that both 
new originator products and biosimilars […] .  
(72) The Notifying Party therefore  claim s in the Form CO that […] . 
The Commission's assessment  
(73) The Commission acknowledges that IBD, as claimed by the Parties, would appear to be a 
disease area where there is considerable R&D activity. There are a significant number of 
new treatments already in P hase III clinical trials (and an even greater number at earlier 
stages of development).  Nonetheless, as mentioned above, there are only two anti -
integrins at any stage of development (SHP647 and Roche’s etrolizumab),47 and their 
mode of action differentiates these compounds from other categories of treatment. 
Closeness of competition 
(74) In light  of the market investigation results , the Commission considers that anti-integrins 
are likely to remain the closest competitors to one another , even if other biologic and 
small molecule treatments reach the market in the intervening period.  
(75) As explained in  more detail in the product market definition, anti -integrins have a better 
safety profile than other classes of biologics , due to their gut -specific mode of action,48 
and there are situations in which anti -integrins (and thus currently Entyvio) would be the 
only suitable treatment.49 
                                                 
47  Another anti -integrin, natalizumab, is also available in the US, but is rarely used and was never launched in 
the EEA due to the high number of cases of progressive multifocal leukoencephalopathy  (PML).  
48  Questionnaire 1 to physicians, Q10, Q16.  
49  Questionnaire 1 to physicians, Q30, Q31.  
 
15 (76) A major competitor confirmed that the similarity in the mode of action of the two 
treatments is very likely to make them close competitors : "Takeda's vedolizumab and 
Shire's SHP647 are both gut -homing T -cell blockers.  While their mechanism of action is 
slightly different, they both aim to stop the trafficking of lymphocytes to the gut wall and 
thus have very similar effects. From a theoretical perspective, the products are very 
similar in their effects, speed of action and safety . Although Shire's SHP647 is not on the 
market yet and, thus, it cannot be assessed in practice, doctors are likely to consider this 
product and Takeda's vedolizumab as part of the same "class" of treatment."50 
(77) Almost all competitors that expressed a view p redicted that SHP647 would compete 
most closely with other anti- integrins, and thus Entyvio, due to the similarity in their 
mode of action.51 One major competitor in the area of gastroenterology explained, for 
example, that "it is likely that SHP647 would most closely compete with Entyvio, as they 
are both anti -integrins, with only subtle difference in the mode of action."52  
Insufficient competitive p ressure from neighbouring markets  
(78) Whilst concluding that the appropriate mar ket is limited to anti- integrins, the 
Commission nonetheless recognises that competitive pressure could theoretically be 
exerted on  Entyvio by products in neighbouring markets, i.e. other classes of biologic s, 
these being anti -TNFs and IL -inhibitors, and potentially the new small molecule agents, 
the first of which (a JAK inhibitor) has been launched very recently.  
(79) The results of the market investigation suggest, however, that competitive pressure from 
these neighbouring markets is limited. This is mainly b ecause other types of biologic 
treatment do not offer the same specific advantages as Entyvio, in particular with respect 
to safety, and do not therefore constitute suitable alternatives in many of the situations in 
which Entyvio would be prescribed, such as for patients with comorbidities.53 
(80) A major competitor explained, for example, that "[Entyvio's] advantage is in being a 
new targeted therapy which lacks systemic immunosuppression, with no cases of extra-
pulmonary or systemic tuberculosis in contrast to anti -TNFs ."54 Another competitor 
stated, similarly, that "w hen compared to anti -TNFs, Entyvio has a new and more GI -
specific MoA [ mode of a ction] leading to a better safety pr ofile (less risk of infection) ."55 
(81) Some market participants also mentioned that Entyvio is particularly effective in 
maintaining remission in ulcerative colitis, whilst anti- TNFs in particular can lose 
effectiveness relatively quickly.56  
(82) The lack of direct competitive pressure exerted by these other classes of biologic s (and in 
future  small molecule agents)  is also demonstrated by the fact that Entyvio is purchased 
outside of tenders , whilst anti -TNFs  in particular often compete against one another 
within the same tender procedures. Whilst purchasing patterns vary somewhat between 
                                                 
50  Minutes of teleconference with a competitor, 6 September 2018, 1:30pm.  
51  Questionnaire 2 to competitors, Q34.  
52  Questionnaire 2 to competitors, Q34.  
53  See Section 4.1.1.3.  
54  Questionnaire 1 to competitors, Q16.  
55  Questionnaire 1 to competitors, Q16.  
56  Questionnaire 1 to competitors, Q16.  
 
16 countries, Entyvio is typically sourced by hospitals through bilateral negotiations,57 
whereas tenders for anti -TNFs create competition between (at least) the different 
biosimilars and originators of a specific molecule,58 and, in some cases, the different  
anti-TNFs .59 
(83) Similarly,  as explained in Section 4.1.1.3, the introduction of biosimilars to Remicade 
(one of the two most often prescribed anti -TNFs) has had little if any effect on the 
pricing of Entyvio, whilst the price of Remicade itself has fallen con siderably.60 This 
shows that biosimilars to anti- TNFs exert competitive pressure on the originator, and 
potentially on other anti -TNFs, but do not appear to exert any signific ant price pressure 
on Entyvio.  
(84) The Commission therefore notes that, while there  may be some competitive pressure 
exerted on anti -integrins by other classes of biologic s that are in neighbouring markets, 
this has not been sufficient in the past to affect pricing of Entyvio as the other classes of 
treatment often do not offer doctors a genuine alternative. As such, whilst there may be 
some competition between the different classes of biologic s, for example in patients 
where a number of treatments would be possible, other types of biologic s would not 
exert the same competitive pressure on  Entyvio as would another anti -integrin.  
Likely delay or discontinuation in the development of SHP647 post -Transaction  
(85) The market investigation has revealed the concern of some respondents that Takeda 
would delay or discontinue the development of SHP647 due to the risk of cannibalising 
sales of Entyvio post -Transaction . 
(86) KOLs are generally very positive about the prospects for SHP647 and emphasise the 
need for new treatment options, given in particular the tendency for specific drugs to lose 
effectiveness after a certain period of time and the lifelong nature of the diseases. Given 
in addition the importance of a good safety profile when choosing a biologic treatment, 
particularly for certain groups of patients, the addition of a further anti -integrin to the 
treatment landscape is seen by doctors as an important development.  
(87) A KOL  in the field explained that "it would … be difficult for Takeda to differentiate 
Entyvio from the new anti -MAdCAM -1 if it held them both in the same portfolio . The 
arrival of another anti -integrin on the market could be expected to  exert some price 
pressure on Entyvio."61  
(88) Both KOLs and competitors see Entyvio and SHP647 as close competitors and question 
whether Takeda would have the incentive to continue development, given the risk of 
cannibalising its own sales  post -Transaction . 
                                                 
57  Questionnaire 3 to hospitals and pharmacies, Q16.  
58  To date, this has applied exclusively to infliximab , for which biosimilars have been available since 2015. 
Biosimilars to adalimumab have been approved more recently and could be expected to compete directly 
with the originator biologic (Humira) through similar tender procedures as of the end of 2018, by which 
time Humira will have lost exclusivity.  
59  Questionnaire 3 to hospitals and p harmacies, Q15.  
60  Questionnaire 1 to physicians, Q36. Questionnaire 3 to pharmacies, Q24. Minutes of teleconference with 
KOL in gastroenterology, 9 August 2018 12.00.  
61  Minutes of teleconference with KOL, 7 August October 2018, 8.00.  
 
17 (89) A KOL familiar with the Shire pipeline explained that "[t]he main question that came to 
the minds of KOLs when hearing about the acquisition of Shire by Takeda was how it 
would affect t he development of the anti -MAdCAM pipeline."62  
(90) Whilst the Notifying Party maintains that […]. A leading specialist explained that: "If, 
for example, it emerges that the specific mechanism of action of the anti -MAdCAM has 
advantages, then even as the third in class, SHP647 could still win considerable market 
share. In any case, it would offer doctors a further option, which would be very w elcome 
in a disease area where loss of responsiveness is a problem."63 
(91) A major competitor predicted that  "the two products would be likely to partially 
cannibalise each other on the market, rather than adding up to a higher overall market 
share ".64 This stat ement highlights exactly why the merged entity is unlikely to have the 
incentive that Shire would have had pre -merger to bring the pipeline SHP647 to market. 
As such, the T ransaction creates a very real risk that the development of a promising new 
treatmen t will be delayed or abandoned.  
(92) Internal documents also indicate that Takeda […] .65  
(93) In addition, whilst Entyvio would, in the normal course of events, lose patent protection 
in […]. Subject to the results of the clinical trials and the regulatory approvals, the new 
formulation  is expected to be launched in the EU in […] . SHP647 would also be 
delivered as a subcutaneous  treatment, thus further reducing any potential incentive to 
try to position the two treatments differently within the same portfolio.   
(94) In view of the above, and taking into consideration that Entyvio and SHP647, if 
successfully developed, will compete closely  with each other  and will not face sufficient 
competitive const raints from other products, the Commission considers that Takeda will 
have the incentive to delay or discontinue  the development of the SHP647 pipeline 
following the merger . The disappearance or delay  of a promising new treatment would 
represent a significant loss of innovation competition , leading to a  loss of product variety 
and reduced intensity of future price competition in the product market, to the detriment 
of consumers . 
(95) The Commission therefore concl udes that the  Transaction raises serious doubts as to its 
compatibility with the internal market in relation to the market for anti- integrins for use 
in the treatment of UC and CD.   
4.3.2. Treatments for chronic idiopathic constipation (CIC)  
(96) Were the market to be defined narrowly at ATC4 level (A6A9 "other drugs for 
constipation"), a n affected market would arise in treatments for chronic idiopathic 
constipation in the UK , as both Parties currently market treatments for this condition.66  
                                                 
62  Minutes of telec onference with KOL, 15 October 2018, 13.30.  
63  Minutes of teleconference with KOL, 15 October 2018, 13.30.  
64  Minutes of teleconference with a competitor, 6 September 2018, 13.30.  
65  […]. 
66  Takeda markets Amitiza (lubiprostone), a chloride 2 activator, an d Shire markets Resolor (prucalopride) , a 
5-HT4 receptor agonist, both of which belong to ATC4 class A6A9 "other drugs for constipation . 
 
18 (97) The Transaction would not, however, lead to any merger -specific changes on this market 
as […] . […],67 […] .  
(98) […]. 
(99) […]. 
(100)  In view of the above, the Commission concludes that  the Transaction would not create 
competition concerns on any p lausible market for CIC in the  UK, given that […] .  
5. COMMITMENTS  
5.1. Framework for the assessment of the Commitments  
(101)  Where a concentration raises serious doubts as regards its compatibility with the internal 
market, the Parties may undertake to modify the concentration so as to remove the 
grounds for the serious doubts identified by the Commission. Pursuant to A rticle 6(2) of 
the Merger Regulation, where the Commission finds that, following modification by the 
undertakings concerned, a notified concentration no longer raises serious doubts, it shall 
declare the concentration compatible with the internal  market pursuant to Article  6(1)(b) 
of the Merger Regulation.  
(102)  As set out in the Commission’s Remedies Notice,68 the commitments have to eliminate 
the competition concerns entirely, and have to be comprehensive and effective from all 
points of view.69 
(103)  In assessing whether commitments will maintain effective competition, the Commission 
considers all relevant factors, including the type, scale and scope of the proposed 
commitments, with reference to the structure and particular characteristics of the market 
in which the Transaction is likely to significantly impede effective competition, 
including the position of the Pa rties and other participants on the market.70  
(104)  In order for the commitments to comply with those principles, they must be capable of 
being implemented effectively within a short period of time. Concerning the form of 
acceptable commitments, the Merger Regul ation gives discretion to the Commission as 
long as the commitments meet the requisite standard. Structural commitments will meet 
the conditions set out above only in so far as the Commission is able to conclude with 
the requisite degree of certainty, at t he time of its Decision, that it will be possible to 
implement them and that it will be likely that the new commercial structures resulting 
from them will be sufficiently workable and lasting to ensure that effective competition 
will be maintained.71 Divest iture commitments are normally the best way to eliminate 
competition concerns resulting from horizontal overlaps.  
                                                 
67  […]. 
68  Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under 
Commission Regu lation (EC) No 802/2004 (OJ C 267, 22.10.2008, p. 1- 27).   
69  Remedies Notice, paragraphs 9 and 61.   
70  Remedies Notice, paragraph 12.   
71  Remedies Notice, paragraph 10.   
 
19 5.2. Proposed Commitments  
(105)  In order to render the concentration compatible with the internal market, the Parties 
submitted a set of commitments und er Article 6(2) of the Merger Regulation on 26 
October 2018 (the "Initial Commitments"). The Commission market tested the Initial 
Commitments in order to assess whether they are sufficient and suitable to remedy the 
serious doubts identified in Section 4.3.1 of this Decision. Following the feedback 
received during the market test, the Initial Commitments were refined and improved, 
and amended commitments were submitted on 16 November 2018 (the "Final 
Commitments"). The Final Commitments are annexed to this D ecision and form an 
integral part thereof.  
5.2.1. Initial Commitments  
(106)  In order to dispel the serious doubts  raised by the Commission , the Parties submitted 
commitments consisting of a full divestiture of the development, manufacturing and 
marketing rights related to Shire's SHP647 pipeline ("the Product") . The Product is 
under development by Shire following an out -licensing agreement with Pfizer  whereby 
the latter granted […] rights  to Shire . The Product is currently undergoing : (i) seven 
Phase III clinical trials for use in UC and CD; (ii) […] ; and (iii) […] . Furthermore, in 
relation to the Product, Shire is developing […] .  
(107)  The Divestment Business includes assets necessary to conduct and complete the 
Product's global clinical trials, obtain the  required marketing authorisation from 
regulatory authorities (if the trials are successful) and bring the product to the EEA and 
(potentially) non- EEA markets. In particular, the Divestment Business includes the 
following main intangible and tangible asse ts: (i) rights to conduct the clinical trials, 
manufacture and market the Product globally; (ii) patents, copyrights, data and know -
how related to the Product; (iii)  trade names for the Product; (iv) licences, permits and 
authorisations issued by third par ties in relation to the Product; (v) the relevant reports 
related to the clinical trials, regulatory files, books and records, and  the documentation 
related to marketing and inventories for the Product; (vi)  contracts with third parties, to 
the extent thes e are transferrable; and (vii) certain members of personnel working on the 
SHP647 programme.  
(108)  Furthermore , with the aim of ensuring a smooth transfer of the Divestment Business, the 
Parties committed to a number of transitional supply arrangements, includi ng regarding: 
(i) the supply of services (e.g. technical assistance), for up to […] ; (ii) the supply of the 
active ingredient for SHP  647, for up to […] ; (iii) the continued sponsorship of the 
clinical trials, until […]; and (iv) the supply of products and services provided to Shire 
by third parties, through back- to-back arrangements, if the contracts in question cannot 
be transferred, for up to […] . 
(109)  In addition to the standard Purchaser  requirements, the Initial Commitments provided 
that the Purchaser must  have:  (i) established capabilities in the clinical development of 
biologic or biosimilar medicinal products for EEA approval; (ii) expertise and 
experience in interactions with EEA -wide and national bodies that decide on approval 
of biologic or biosimilar  medicinal products and on pricing and reimbursement of 
biologic or biosimilar medicinal products; (iii) established capabilities or a track record 
in the distribution of biologic or biosimilar medicinal products in the EEA; and (iv) a 
complementary produc t portfolio in the clinical areas relevant to SHP647. 
 
20 (110)  In addition, the Commitments provide for the Parties  to enter into related commitments, 
inter alia  regarding the separation of the divested businesses from their retained 
businesses, the preservation of the viability, marketability and competitiveness of the 
divested businesses, including the appointment of a monitoring trustee and, if necessary, 
a div estiture trustee.  
(111)  Finally, the Initial Commitments provide for the rights to manufacture and market the 
Product outside the EEA to potentially be returned to the merged entity after the 
divestiture, on the basis of commercial arrangements to be agreed with  the Purchaser.   
(112)  The Parties argue d that the C ommitments remedy the Commission's concerns since they 
remove the entire potential  overlap with respect to the Parties' marketed and pipeline 
products  used in the treatment of moderate -to-severe UC and CD . The Parties  further 
argued that the assets to be transferred are sufficient for a Purchaser to continue the 
development and, depending on the outcome of the clinical trials, ultimately market the 
SHP647 compound, thus allowing  the Purchaser to operate the Divestment Business as 
a viable and independent business in the EEA.72 In addition, the Parties  explained that 
Shire has already incurred […]  part of the estimated dev elopment costs for the pipeline, 
which has already reached an advanced development stage ( Phase III clinical trials), 
thereby making its divestment  an attractive commercial opportunity for potential 
purchasers.73 
5.2.2. Results of the market test  
(113)  The market test was launched on 29 October 2018 and sought to assess the scope and 
effectiveness of the Ini tial Commitments, their viability, the attractiveness of the 
Divestment Business, and  the appropriateness of the Purchaser criteria.  
(114)  The majority of market participants  that responded to the market test consider ed the 
Divestment Business to be an attracti ve asset likely to appeal to suitable purchasers.74 
(115)  In terms of its scope, market participants were of the opinion that the Divestment 
Business i ncludes all the necessary assets for a purchaser to be able to continue the 
clinical trials and ultimately bring  the product to the EEA market.75 Some competitors 
indicated that specific additional documents related to pre -clinical studies may be 
required as part of the reporting and data that are  transferred  to the Purchaser .76  
(116)  As concerns the potential licenc e-back  for the non- EEA rights, the  respondents to the 
market test noted that it is very common for a particular biologic drug to be 
manufactured on two different sites .77 Furthermore, all KOLs considered it customary 
for different companies to market the same dru g in different geographic regions.78 The 
majority of respondents were of the opinion that the potential split of the manufacturing 
and marketing rights for SHP647 (between the P urchaser in the EEA and potentially 
                                                 
72  Form RM, paragraph 19.  
73  Form RM, paragraph 20.  
74  Questionnaire R1 to competitors, Q12. Questionnaire R2 to KOLs, Q10.  
75  Questionnaire R1 to competitors, Q3. Questionnaire R2 to KOLs, Q1.  
76  Questionnaire R1 to competitors, Q3.  
77  Questionnaire R1 to competitors, Q8 and Q11.  
78  Questionnaire R2 to KOLs, Q9.  
 
21 Takeda in non- EEA regions) would not affect the viability or competitiveness of the 
Divestment Business .79 Similarly, the majority of  competitors  considered that there 
would not be any effect on the purchaser's incentive to continue development of the 
SHP647 and bring it to the market.80  
(117)  As regards potential implementation risks, while market participants acknowledged that 
the transfer of third party supply contracts is standard practice  in pipeline divestments 
and does not generally entail particular hurdles, they explained that, if contracts with 
third parties are not transferred to the Purchaser (in particular as regards CRO services 
and cell line  technology), this could cause delays i n the pipeline development.81 
(118)  Overall, the vast majority of respondents confirmed that the Divestment Business has all 
the assets to be operated in a viable manner by a suitable purchaser,82 and that the Key 
Personnel as identified in the Initial Commitments  covered all the necessary roles.83 
(119)  As concerns the suitable purchaser, t he results of the market test also indicated that the 
most suitable type of purchaser would be a large pharma company84 with: (i) experience 
in developing biologics or biosimilars85 and the capacity to market this type of 
treatment in the EEA,86 (ii) experience in dealing with EEA authorities responsible for 
the approval of medicines ,87 and (iii) a complementary portfolio in GI and possibly 
even in the area of IBD .88 
(120)  Competitors were general ly of the opinion that the transitional arrangements provided 
for in the Initial Commitments were sufficient to ensure a smooth transfer of the 
Divestment Business.89 Respondents to the market test also indicated that a change in 
the contract research company (CRO) or in the cell line technology used in the 
development of SHP647 could lead to significant delays in its development and 
additional costs.90  
5.2.3. Final Commitments  
(121)  In view of the results of the market test, the Parties amended the Initial Commitments 
and submitted the Final Commitments on 16 November  2018.  
(122)  In particular, the main changes aim to mitigate  any risks of delays in product 
development during the transitional period and to  ensur e that the Purchaser has such  
capabilities as will further increas e the chances of the product successfully reaching  the 
market (and becoming available to  patients in need of this treatment in the EEA) , as was 
                                                 
79  Questionnaire  R1 to competitors, Q9.  
80  Questionnaire R1 to competitors, Q10.  
81  Questionnaire R1 to competitors, Q19, Q20 and Q21. Questionnaire R2 to KOLs, Q17, 18 and 19.  
82  Questionnaire R1 to competitors, Q5. Questionnaire R2 to KOLs, Q3.  
83  Questionnaire R1 to co mpetitors, Q6. Questionnaire R2 to KOLS, Q4.  
84  Questionnaire R1 to competitors, Q14. Questionnaire R2 to KOLs, Q11.  
85  Questionnaire R1 to competitors, Q16.1. Questionnaire R2 to KOLs, Q14.1.  
86  Questionnaire R1 to competitors, Q16.3. Questionnaire R2 to KOLs, Q14.3.  
87  Questionnaire R1 to competitors, Q16.2. Questionnaire R2 to KOLs, Q14.2.  
88  Questionnaire R1 to competitors, Q16.4. Questionnaire R2 to KOLs, Q14.4.  
89  Questionnaire R1 to competitors, Q17.  
90  Questionnaire R1 to competitors, Q19, Q20 and Q 21. 
 
22 planned prior to the merger . Against this background, the Final Commitments su bmitted 
by the Parties specifically provide for the following improvements compared to the 
Initial Commitments:  
(a) to ensure a smooth transfer of the Product without causing delays to its 
development, the Purchaser must have preliminarily concluded agreement s 
with various third party providers (including the CRO and the provider of the 
cell line technology) ;  
(b) the Purchaser must have a complementary product portfolio specifically in the 
area of GI and preferably IBD ;  
(c) Shire must, prior to the closing of the transaction between Takeda and Shire, 
take the necessary decision s to […]  according to the planned schedule;  
(d) Shire and subsequently Takeda (following closing of the transaction between 
Takeda and Shire) must continue to provide the CRO with all the input 
required to ensure that development of SHP647 continues uninterrupted during 
the transitional period ; and 
(e) the divestment business  includes all the relevant documentation on the results 
of preclinical studies . 
(123)  The lan guage of the Final Commitments has also been amended to clarify that any 
potential licence -back of the manufacturing and marketing rights outside of the EEA 
(paragraph (111) ) will be at the option of the Purchaser.  
5.2.4. Overall assessment of the Final Commitments  
(124)  The Final Commitments remove the entire overlap between the Parties' activities in 
relation to the market for which the Commission raised seriou s doubts  following the 
results of the Phase I market investigation . In particular, the Final Commitments include 
the tangible and intangible assets necessary to conduct and complete the clinical trials at 
global level for the Product, and, if successful, obtain a marketing authorisation and 
bring the Product to the market.  
(125)  The Final Commitments also include transitional arrangements which are sufficient, 
both in scope and duration, to ensure a smooth transfer of the Divestment Business to 
the Purchaser. Fu rthermore, the Final Commitments include  targeted  purchaser criteria, 
such that the Divestment Business will be transferred to a suitable purchaser.  
(126)  The Final Commitments also address the shortcomings of the Initial Commitments, as 
identified by market par ticipants in the market test.  
(127)  On this basis, and in view of the presence of a number of interested Purchasers, the 
Commission considers that the Divestment Business is attractive and likely to be 
acquired by a suitable Purchaser.  
(128)  For the reasons outlined above, the Commission concludes that the Final Commitments 
are sufficient in scope and suitable to eliminate the serious doubts as to the 
compatibility of the T ransaction with the internal market  given the purpose of 
Article  6(2) o f the Merger Regulation . 
 
23 5.3. Conditions and obligations  
(129)  Under the first sentence of the second subparagraph of Article 6(2) of the Merger 
Regulation, the Commission may attach to its decision conditions and obligations 
intended to ensure that the undertakings concerned comply with the commitments they 
have entered into vis -à-vis the Commission with a view to rendering a notified 
concentration compatible with the internal market.  
(130)  The achievement of the measure that gives rise to the structural change of the mar ket is 
a condition, whereas the implementing steps which are necessary to achieve this result 
are generally obligations on the Parties. Where a condition is not fulfilled, the 
Commission's decision declaring the concentration compatible with the internal market 
no longer stands. Where the undertakings concerned commit a breach of an obligation, 
the Commission may revoke the clearance decision in accordance with Article 8(6) of 
the Merger Regulation. The undertakings concerned may also be subject to fines and 
periodic penalty payments under Articles 14(2) and 15(1) of the Merger Regulation.  
(131)  In accordance with the distinction described above, the Decision in this case is 
conditioned on the full compliance with the requirements set out in Section B of the 
Final Commitments (including the Schedule), which constitute conditions. The 
remaining requirements set out in the other Section of the Final Commitments constitute 
obligations on Takeda.  
(132)  The detailed text of the Final Commitments is annexed to this  Decision.  The full text of 
the final Commitments forms an integral part of this Decision.  
6. CONCLUSION  
(133)  For the above reasons, the Commission has decided not to oppose the notified operation 
as modified by the commitments and to declare it compatible with the interna l market 
and with the functioning of the EEA Agreement, subject to full compliance with the 
conditions in S ection  B of the C ommitments annexed to the present decision and with 
the obligations contained in the other sections of the said C ommitments. This Decision 
is adopted in application of Article 6(1)(b) in conjunction with Article  6(2) of the 
Merger Regulation and Article 57 of the EEA Agreement.  
For the Commission 
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission 
M.8955 – Takeda  / Shire  
 
  
Dated 16 November 2018  
 
 
Takeda Pharmaceutical Company Limited  
Shire plc  
 
Case No COMP/M.8955 –Takeda/Shire 
Commitments to the European Commission  
   
 
 
 
 
 
 
 
   
 
2 CASE NO. COMP/M.8955 – Takeda/Shire  
Commitments to the European Commission  
Pursuant to Article 6(2 of Council Regulation (EC) No. 139/2004 (the “ Merger 
Regulation ”), Takeda Pharmaceutical Company Limited (“Takeda ”) and Shire plc 
(“Shire ”) (the “ Parties ”, each a “ Party ”) hereby enter into the following Commitments 
(the “Commitments ”) vis -à-vis the European Commission (the “ Commission ”) with a 
view to rendering the acquisition by Takeda of sole control over Shire (the “ Takeda/Shire 
Transaction ”) compatible with the internal market and the functioning of the EEA 
Agreement.  
This text shall be interpreted in light of the Commission’s decision pursuant to Article 
6(1)(b) of the Merger Regulation to declare the Takeda/Shire Transaction compatible with 
the internal market and the functi oning of the EEA Agreement (the “ Decision ”), in the 
general framework of European Union law, in particular in light of the Merger Regulation, 
and by reference to the Commission Notice on remedies acceptable under Council 
Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004 (the 
“Remedies Notice”).  
Section A.  Definitions  
1. For the purpose of the Commitments, the following terms shall have the following meaning:  
Affiliated Undertakings : undertakings controlled by the Parties and/or by th e ultimate 
parents of the Parties, whereby the notion of control shall be interpreted pursuant to Article 3 
of the Merger Regulation and in light of the Commission Consolidated Jurisdictional Notice 
under Council Regulation (EC) No 139/2004 on the control of concentrations between 
undertakings (the “ Consolidated Jurisdictional Notice ”). 
Assets: the assets that contribute to the current operation or are necessary to ensure the 
viability and competitiveness of the Divestment Business as indicated in Section B , 
paragraph 5 (a), (b) and (c) and described more in detail in the Schedule.  
Closing : the transfer of the legal title of the Divestment Business to the Purchaser.  
Closing Period : the period of […] from the approval of the Purchaser and the terms of sale 
by the Commission.  
Confidential Information : any business secrets, know -how, commercial information, or any 
other information of a proprietary nature that is not in the public domain.  
Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and 
independence in discharging its duties under the Commitments.  
Divestment Business: the business related to Shire’ s pipeline compound SHP 647 as 
defined in Section B and in the Schedule which Takeda commits to divest.  
Divestiture Trustee : one or more natural or legal person(s) who is/are approved by the 
Commission and appointed by Takeda and who has/have received from Takeda the 
exclusive Trustee Mandate to sell the Divestment Business to a Purchaser at no minimum 
price.  
Effective Date: the date of adoption of the Decision.  
 
3 First Divestiture Period : the period of […].  
Hold Separate Manager : the person appointed by the Parties, follow ing approval by the 
European Commission, for the Divestment Business to manage the day -to-day business 
under the supervision of the Monitoring Trustee.  
Key Personnel : all personnel necessary to maintain the viability and competitiveness of the 
Divestment B usiness, as listed in the Schedule, including the Hold Separate Manager.  
Monitoring Trustee : one or more natural or legal person(s), who is/are approved by the 
Commission and appointed by Takeda, and who has/have the duty to monitor Takeda’ s 
compliance wi th the conditions and obligations attached to the Decision.  
Personnel : all staff currently employed by the Divestment Business, including staff currently 
seconded to the Divestment Business and shared personnel.  
Pfizer : Pfizer Limited, a company incorporat ed under the laws of England, with its registered 
office at Ramsgate Road, Sandwich, Kent CT13 9NJ, United Kingdom.  
Pfizer Agreement : the License Agreement between Pfizer and Shire International GmbH, 
dated […], and modifications thereto, whereby Pfizer gr ants to Shire […].  
Purchaser : […] or another third party entity, in each case approved by the Commission as 
acquirer of the Divestment Business in accordance with the criteria set out in Section D.  
Purchaser Criteria : the criteria laid down in paragraph 17 of these Commitments that the 
Purchaser must fulfil in order to be approved by the Commission.  
Schedule : the schedule to these Commitments describing more in detail the Divestment 
Business.  
SHP 647 : Shire ’s in-licensed pipeline biologic compound (derived from the monoclonal 
antibody to MAdCAM), for use in any indication, currently in Phase III clinical trials for the 
treatment of Ulcerative colitis (" UC") and Crohn ’s disease (" CD") and also expected to 
undergo […]. SHP 647 refers to the raw materials, work  in progress, drug substance 
(including API) and drug product . 
SHP 647 API : The active ingredient of SHP 647.  
Shire : Shire plc, a company incorporated under the laws of Jersey, with its registered office 
at 22 Grenville Street, St Helier, JE4 8PX, Jersey.  
Shire International GmbH : an Affiliated Undertaking of Shire incorporated under the laws 
of Switzerland, with its registered office at Zahlerweg 10, CH -6300, Zug, Switzerland.  
Takeda: Takeda Pharmaceutical Company Limited, a company incorporated under the laws 
of Japan, with its registered office at 1- 1, Doshomachi 4- chome, Chuo- ku, Osaka, Japan.  
Technical Expert : one or more natural or legal person(s), appointed by and reporting to the 
Monitoring Trustee, who has/have expertise relevant to the Divestment B usiness. If the 
Monitoring Trustee has the necessary technical expertise, the Monitoring Trustee and 
Technical Expert can be the same natural or legal person.  
Trustee(s) : the Monitoring Trustee and/or the Divestiture Trustee as the case may be.   
Trustee Divestiture Period : the period of […] from the end of the First Divestiture Period.  
Variation Agreement : […].  
 
4 Section B.  The commitment to divest and the Divestment Business 
Commitment to divest 
2. In order to maintain effective competition, Takeda commits to divest the Divestment 
Business by the end of the Trustee Divestiture Period as a going concern to a purchaser 
and on terms of sale approved by the Commission in accordance with the procedure 
described in paragraph 18 of these Commitments. To carry out the divestiture, the Parties 
commit to find a purchaser and to enter into a final binding sale and purchase agreement for 
the sale of the Divestment Business within the First Divestiture Period. If the Parties have 
not entered into such an agreement at the end of the First Divestiture Period, Takeda shall 
grant the Divestiture Trustee an exclus ive mandate to sell the Divestment Business in 
accordance with the procedure described in paragraph 32  in the Trustee Divestiture Period. 
[…].  
3. Take da shall be deemed to have complied with this commitment if:  
(a) by the end of the Trustee Divestiture Period, Takeda, Shire, or the Divesture 
Trustee has entered into) a final binding sale and purchase agreement ([…]), and 
the Commission approves the proposed purchaser and the terms of transfer or 
sale, as the case may be, as being consistent with the Commitments in 
accordance with the procedure described in paragraph 18; and  
(b) if the Closing of the sale of the Divestment Business to the Purchaser takes place 
within the Closing Period.  
4. In order to maintain the structural effect of the Commitments, Takeda shall, for a period of 10 
years after Closing, not acquire, whether directly or indirectly, the possibility of exercising 
influence (as defined in paragraph 43 of the Remedies Notice, footnote 3) over the whole or 
part of the Divestment Business, unless, following the submission of a reasoned request 
from Takeda showing good cause and accompanied by a report from the Monitoring Trustee 
(as provided in paragraph 45 of these Commitments), the Commission finds that the 
structure of the market has changed to such an extent that the absence of influence over 
the Divestment Business is no  longer necessary to render the Takeda/Shire Transaction 
compatible with the internal market.  
Structure and definition of the Divestment Business  
5. The Divestment Business consists of all relevant rights, title and interests in SHP 647 
worldwide including th e assignment to the Purchaser of the Pfizer Agreement, as well as 
certain ancillary assets and the rights to or licence for certain technologies needed to 
successfully develop SHP 647. At the option of the Purchaser, the sale of the Divestment 
Business may  include a licence- back to the Parties in respect of the right to manufacture 
and market SHP 647 in territories outside the EEA. The legal and functional structure of the 
Divestment Business as operated to date is described in the Schedule. The Divestment 
Business, described in more detail in the Schedule, includes all assets and staff that 
contribute to the current operation or are necessary to ensure the viability and 
competitiveness of the Divestment Business, in particular:  
(a) all tangible and intangible a ssets (including intellectual property rights);  
 
5 (b) all licences, permits and authorisations issued by any governmental organisation 
for the benefit of the Divestment Business;  
(c) all contracts, leases and commitments of the Divestment Business; all credit and 
other records of the Divestment Business; and  
(d) the Personnel.  
6. For the sake of clarity, the Divestment Business shall not include any physical production 
assets or manufacturing units owned or operated by the Parties.  
7. The Parties commit to provide the technical support necessary to ensure an effective 
transfer (i) of the Divestment Business ’s production process to a production location of the 
Purchaser ’s choice and (ii) of the c linical trials and, if need be, to enter into a supply 
agreement with the Purchaser for the supply of SHP 647 API for an appropriate period of 
time at cost. Furthermore, the Parties commit to continue to act as a sponsor for all clinical 
trials underway for a period until Closing. At the Purchaser ’s request, with respect to any 
clinical t rial, this period can be extended for a mutually agreed period, subject to a service 
fee to be agreed with the Purchaser.  
8. In addition, the Divestment Business includes the benefit, for a transitional period of up to 
[…] after Closing and on terms and condi tions equivalent to those at present afforded to the 
Divestment Business, of all current arrangements under which Shire or its Affiliated 
Undertakings supply services to the Divestment Business, as detailed in the Schedule, 
unless otherwise agreed with the Purchaser. Strict firewall procedures will be adopted so as 
to ensure that any competitively sensitive information related to, or arising from such supply 
arrangements (for example, product roadmaps) will not be shared with, or passed on to, 
anyone outside the Parties ’ entity(ies) providing such services.  
Section C.  Related Commitments  
Preservation of viability, marketability and competitiveness  
9. From the Effective Date until Closing, the Parties shall preserve the economic viability, 
marketability and competitiveness of the Divestment Business, in accordance with good 
business practice, and shall minimise as far as possible any risk of loss of competitive 
potential of the Divestment Business. In particular, the Parties undertake:  
(a) not to carry out any acti on that might have a significant adverse impact on the 
value, management or competitiveness of the Divestment Business or that might 
alter the nature and scope of activity, or the industrial or commercial strategy or the 
investment policy of the Divestment  Business;  
(b) to make available, or procure to make available, sufficient resources for the 
development of the Divestment Business, on the basis and continuation of the 
existing business plans;  
(c) to take all reasonable steps, or procure that all reasonable steps are being taken, 
including appropriate incentive schemes (based on industry practice), to encourage 
all Key Personnel to remain with the Divestment Business, and not to solicit or 
move any Personnel to the Parties ’ remaining businesses. Where, nevertheless, 
individual members of the Key Personnel exceptionally leave the Divestment 
Business, the Parties shall provide a reasoned proposal to replace the person or 
 
6 persons concerned to the Commission and the Monitoring Trustee. The Parties 
must be able to demonstrate to the Commission that the replacement is well suited 
to carry out the functions exercised by those individual members of the Key 
Personnel. The replacement shall take place under the supervision of the 
Monitoring Trustee, who shall report to the C ommission.  
Hold -separate obligations  
10. The Parties commit, from the Effective Date until Closing, to keep the Divestment Business 
separate from the business(es) they are retaining and to ensure that unless explicitly 
permitted under these Commitments:  
(a) management and staff of the business(es) retained by the Parties have no 
involvement in the Divestment Business;  
(b) the Key Personnel and Personnel of the Divestment Business have no involvement 
in any business retained by the Parties and do not report to an y individual outside 
the Divestment Business.  
11. The Parties shall assist the Monitoring Trustee in ensuring that the Divestment Business is 
managed as a distinct and saleable entity separate from the businesses which the Parties 
are retaining. Immediately af ter the adoption of the Decision, Shire shall propose a Hold 
Separate Manager to the European Commission for its approval and shall appoint said Hold 
Separate Manager once approval has been received. Should the first candidate proposed 
not be approved by t he Commission, Shire shall propose further suitable candidates for the 
post of Hold Separate Manager. The Hold Separate Manager, who shall be part of the Key 
Personnel, shall manage the Divestment Business independently and in the best interest of 
the busi ness with a view to ensuring its continued economic viability, marketability and 
competitiveness and its independence from the businesses retained by Takeda. The Hold 
Separate Manager shall closely cooperate with and report to the Monitoring Trustee, who 
may be assisted by the Technical Expert, and, if applicable, the Divestiture Trustee. Any 
replacement of the Hold Separate Manager shall be subject to the procedure laid down in 
paragraph 9(c) of these Commitments. The Commission may, after having heard the 
Parties, require the Parties to replac e the Hold Separate Manager.  
Ring -fencing  
12. The Hold Separate Manager shall implement all necessary measures to ensure that Takeda 
does not obtain any Confidential Information relating to the Divestment Business and that 
any such Confidential Information obtained by Takeda before the Effective Date will be 
eliminated and not be used by Takeda. In particular, the participation of the Divestment 
Business in any central information technology network shall be severed to the extent 
possible, without compromising the viability of the Divestment Business. Takeda may obtain 
or keep information relating to the Divestment Business which is reasonably necessary for 
the divestiture of the Divestment Business or the disclosure of which to Takeda is required 
by law. In or der to ensure that the measures are effective Takeda commits to create 
additional reasonable mechanisms with regard to the personnel involved in the provisions of 
such service to ensure that any Confidential Information is not shared with businesses that 
Takeda is retaining.  
 
7 Non-solicitation clause  
13. The Parties undertakes, subject to customary limitations, not to solicit, and to procure that 
Affiliated Undertakings do not solicit, the Key Personnel transferred with the Divestment 
Business for a period of [ …] after Closing.  
Due diligence  
14. In order to enable potential purchasers to carry out a reasonable due diligence of the 
Divestment Business, the Parties shall, subject to customary confidentiality assurances and 
dependent on the stage of the divestiture pr ocess:  
(a) provide to potential purchasers sufficient information as regards the Divestment 
Business;  
(b) provide to potential purchasers sufficient information relating to the Personnel and 
allow them reasonable access to the Personnel.  
Reporting  
15. The Parties sha ll submit written reports in English on potential purchasers of the Divestment 
Business and developments in the negotiations with such potential purchasers to the 
Commission and the Monitoring Trustee no later than 10 days after the end of every month 
following the Effective Date (or otherwise at the Commission’ s request). The Parties shall 
submit a list of all potential purchasers having expressed interest in acquiring the 
Divestment Business to the Commission at each and every stage of the divestiture process, 
as well as a copy of all the offers made by potential purchasers within five days of their 
receipt.  
16. The Parties shall inform the Commission and the Monitoring Trustee on the preparation of 
the data room documentation and the due diligence procedure and shall submit a copy of 
any information memorandum to the Commission and the Monitoring Trustee before 
sending the memorandum out to potential purchasers.  
Section D.  The Purchaser  
17. In order to be approved by the Commission, the Purchaser must fulfil the f ollowing criteria:  
(a) The Purchaser shall be independent of and unconnected to Takeda and its 
Affiliated Undertakings (this being assessed having regard to the situation following 
the divestiture);  
(b) The Purchaser shall have the financial resources, proven expertise and incentive 
to maintain and develop the Divestment Business as a viable and active 
competitive force in competition with the Parties and other competitors;  
(c) The acquisition of the Divestment Business by the Purchaser must neither be likely 
to create, in light of the information available to the Commission, prima facie  
competition concerns nor give rise to a risk that the implementation of the 
Commitments will be delayed. In particular, the Purchaser must reasonably be 
expected to obtain all necessary  approvals from the relevant regulatory authorities 
for the acquisition of the Divestment Business;  
 
8 (d) The Purchaser shall have a binding agreement with […] in relation to the cell line 
technology necessary for the development of SHP 647;  
(e) The Purchaser shall have a binding agreement with […] in relation to the 
production of the final drug product for SHP 647;  
(f) The Purchaser shall have a binding agreement with […] for the CRO services 
provided in relation to SHP 647;  
(g) The Purchaser shall have established capabilities in the clinical development of 
biologic or biosimilar medicinal products for EEA approval ;  
(h) The Purchaser shall have expertise and experience in having relevant interactions 
with relevant EEA -wide and national bodies that decide on approval of  biologic or 
biosimilar medicinal products and on pricing and reimbursement of biologic or 
biosimilar medicinal products ; 
(i) The Purchaser shall have established capabilities or a track record in the 
commercialisation and distribution of biologic or biosimilar medicinal products in 
the EEA ; and  
(j) The Purchaser shall have complementary product(s), either marketed or in 
development, in the clinical areas relevant to SHP 647, in particular in the area of 
gastrointestinal diseases (GI), preferably in the area of inflammatory bowel disease 
(IBD) . 
18. The final binding sale and purchase agreement (as well as ancillary agreements) relating 
to the divestment of the Divestment Business shall be conditional on the Commission’ s 
approval. The Parties shall ensure the sale and purchase agreement includes a provision 
specifying that:  
(i) subject to (ii), the Purchaser shall not make any changes to the protocols 
previously agreed between Shire and […] such as that could lead to a delay in 
the progress of the clinical trials for SHP 64 7 (relative to the timing agreed 
between […] and Shire prior to the Effective Date); and  
(ii) where changes to the protocol are deemed necessary or desirable (for 
example to comply with legal or safety requirements), the Purchaser shall 
notify the Commission and the Trustee, as applicable, and provide detailed 
explanation as to the background of these changes as well as their potential 
impact on the timing of the development of SHP 647.  
When Takeda or Shire has reached an agreement with a purchaser, the Parties shall 
submit a fully documented and reasoned proposal, including a copy of the final 
agreement(s), within one week to the Commission and the Monitoring Trustee. The Parties 
must be able to demonstrate to the Commission that the purchaser fulfils the Purc haser 
Criteria and that the Divestment Business is being transferred, or, as the case may be, sold 
in a manner consistent with the Commission's Decision and the Commitments. For the 
approval, the Commission shall verify that the purchaser fulfils the Purchaser Criteria and 
that the Divestment Business is being transferred, or, as the case may be, sold in a 
manner consistent with the Commitments including their objective to bring about a lasting 
structural change in the market. The Commission may approve the transfer, or, as the case 
may be, sale of the Divestment Business without one or more Assets or parts of the Key 
Personnel, or by substituting one or more Assets or parts of the Key Personnel with one or 
 
9 more different assets or different personnel, if th is does not affect the viability and 
competitiveness of the Divestment Business after the sale, taking account of the proposed 
purchaser.  
Section E.  Trustee  
I. Appointment procedure  
19. Takeda shall appoint a Monitoring Trustee to carry out the functions specified in these 
Commitments for a Monitoring Trustee. Takeda commits not to close the Takeda/Shire 
Transaction before the appointment of a Monitoring Trustee.  
20. Any Technical Expert shall be appointed by and report to the Monitoring Trustee. The 
Technical Expert will be independent of and will not have or be exposed to any conflict of 
interest in relation to the Parties. Takeda and the Purchaser shall have the right to be heard 
with any reasoned objections as to the suitability of any technical expert candidates, e.g., 
lack of competence or conflict of interest. In cases of controversy between Takeda and the 
Monitoring Trustee, and/or Purchaser and the Monitoring Trustee as to the suitability of the 
technical expert candidate, the Commission will decide on the matter.  
21. If Takeda or Shire has not entered into a binding sale and purchase agreement or the 
Variation Agreement regarding the Divestment Business […] before the end of the First 
Divestiture Period or if the Commission has rejected a purchaser propos ed by Takeda at 
that time or thereafter, Takeda shall appoint a Divestiture Trustee. The appointment of the 
Divestiture Trustee shall take effect upon the commencement of the Trustee Divestiture 
Period.  
22. The Trustee shall:  
(a) at the time of appointment, be ind ependent of Takeda and its Affiliated 
Undertakings;  
(b) possess the necessary qualifications to carry out its mandate, for example have 
sufficient relevant experience as an investment banker or consultant or auditor; and 
(c) neither have nor become exposed to a Conflict of Interest.  
23. The Trustee shall be remunerated by Takeda in a way that does not impede the 
independent and effective fulfilment of its mandate. In particular, where the remuneration 
package of a Divestiture Trustee includes a success premium linked to the final sale value 
of the Divestment Business, such success premium may only be earned if the divestiture 
takes place within the Trustee Divestiture Period.  
 
10 Proposal by Takeda  
24. No later than two weeks after the Effective Date, Takeda shall submit the name or names of 
at least two natural or legal persons whom Takeda proposes to appoint as the Monitoring 
Trustee to the Commission for approval. No later than one month before the end of the First 
Divestiture Period or on request by the Commission, Takeda shall submit a list of one or 
more persons whom Takeda proposes to appoint as Divestiture Trustee to the Commission 
for approval. The proposal shall contain sufficient information for the Commission to verify 
that the person or persons proposed as Trustee fulfil the requirements set out in 
paragraph 22 and shall include:  
(a) the full terms of the proposed mandate, which shall include all provisions 
neces sary to enable the Trustee to fulfil its duties under these Commitments;  
(b) the outline of a work plan which describes how the Trustee intends to carry out its 
assigned tasks;  
(c) an indication whether the proposed Trustee is to act as both Monitoring Trustee 
and Divestiture Trustee or whether different trustees are proposed for the two 
functions.  
Approval or rejection by the Commission  
25. The Commission shall have the discretion to approve or reject the proposed Trustee(s) and 
to approve the proposed mandate subj ect to any modifications it deems necessary for the 
Trustee to fulfil its obligations. If only one name is approved, Takeda shall appoint or cause 
to be appointed the person or persons concerned as Trustee, in accordance with the 
mandate approved by the Commission. If more than one name is approved, Takeda shall be 
free to choose the Trustee to be appointed from among the names approved. The Trustee 
shall be appointed within one week of the Commission’ s approval, in accordance with the 
mandate approved by t he Commission.  
New proposal by Takeda  
26. If all the proposed Trustees are rejected, Takeda shall submit the names of at least two 
more natural or legal persons within one week of being informed of the rejection, in 
accordance with paragraphs 19 and 25 of these Commitments.  
Trustee Nominated by th e Commission  
27. If further proposed Trustees are rejected by the Commission, the Commission shall 
nominate a Trustee, whom Takeda shall appoint, or cause to be appointed, in accordance 
with a trustee mandate approved by the Commission.  
II. Functions of the Trus tee  
28. The Trustee shall assume its specified duties and obligations in order to ensure compliance 
with the Commitments. The Commission may, on its own initiative or at the request of the 
Trustee or Takeda, give any orders or instructions to the Trustee in order to ensure 
compliance with the conditions and obligations attached to the Decision.  
 
11 Duties and obligations of the Monitoring Trustee  
29. The Monitoring Trustee shall:  
(i) propose in its first report to the Commission a detailed work plan describing how it 
intends to monitor compliance with the obligations and conditions attached to the 
Decision.  
(ii) oversee, in close co- operation with the Technical Expert and the Hold Separate 
Manager, the on- going management of the Divestment Business with a view to 
ensuring its continued economic viability, marketability and competitiveness and 
monitor compliance by the Parties with the conditions and obligations attached to 
the Decision. To that end the Monitoring Trustee shall:  
(a) monitor the preservation of the economic viability, marketability and 
competitiveness of the Divestment Business, and the keeping separate of 
the Divestment Business from the businesses retained by the Parties, in 
accordance with paragraphs 9 and 10 of these Commitments;  
(b) supervise the management of the Divestment Business as a distinct and 
saleable entity, in accordance with paragraph 11  of these Commitments;  
(c) with respect to Confidential Information:  
− determine all necessary measures to ensure that Takeda does not 
after the Effective Date obtain any Confidential Information relating to 
the Divestment Business  
− in particular strive for the severing of the Divestment Business ’ 
participation in a central information technology network to the extent 
possible, without compromising the viability of the Divestment 
Business,  
− make sure that any Confidential Information relating to the 
Divestment Business obtained by Takeda before the Effective Date is  
eliminated and will not be used by Takeda; and  
− decide whether such information may be disclosed to or kept by 
Takeda as the disclosure is reasonably necessary to allow Takeda to 
carry out the divestiture or as the disclosure is required by law;  
(d) monitor the splitting of assets and the allocation of Personnel between the 
Divestment Business and the Parties or Affiliated Undertakings;  
(iii) propose to the Parties such measures as the Monitoring Trustee considers 
necessary to ensure the Parties ’ compliance with the conditions and obligations 
attached to the Decision, in particular the maintenance of the full economic viability, 
marketability or competitiveness of the Divestment Business, the holding separate 
of the Divestment Business and the non- disclosure of compet itively sensitive 
information;  
(iv) review and assess potential purchasers as well as the progress of the divestiture 
process and verify that, dependent on the stage of the divestiture process:  
(a) potential purchasers receive sufficient and correct information rel ating to 
the Divestment Business and the Personnel in particular by reviewing, if 
 
12 available, the data room documentation, the information memorandum and 
the due diligence process, and  
(b) potential purchasers are granted reasonable access to the Personnel;  
(v) act as a contact point for any requests by third parties, in particular potential 
purchasers, in relation to the Commitments;  
(vi) provide to the Commission, sending the Parties a non- confidential copy at the 
same time, a written report within 15 days after the end of every month that shall 
cover the operation and management of the Divestment Business as well as the 
splitting of assets and the allocation of Personnel so that the Commission can 
assess whether the business is held in a manner consistent with the Comm itments 
and the progress of the divestiture process as well as potential purchasers;  
(vii) promptly report in writing to the Commission, sending the Parties a non- confidential 
copy at the same time, if it concludes on reasonable grounds that the Parties are 
failing to comply with these Commitments;  
(viii) within one week after receipt of the documented proposal referred to in paragraph 
18 of these Commitments, submit to the Commission, sending the Parties a non-
confidential copy at the same time, a reasoned opinion as to the suitability and 
independence of the proposed purchaser and the viability of the Divestment 
Business after the Sale a nd as to whether the Divestment Business is sold in a 
manner consistent with the conditions and obligations attached to the Decision, in 
particular, if relevant, whether the Sale of the Divestment Business without one or 
more Assets or not all of the Personnel affects the viability of the Divestment 
Business after the sale, taking account of the proposed purchaser; and  
(ix) assume the other functions assigned to the Monitoring Trustee under the 
conditions and obligations attached to the Decision.  
30. The Monitoring Trustee may, if this is deemed necessary by the Monitoring Trustee,1 be 
assisted and advised by the Technical Expert with regard to all technical questions related to 
the Divestment Business. Any information provided to the Monitoring Trustee may also be 
exchanged with the Technical Expert.  
31. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the 
Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each other 
during and for the purpose of the preparati on of the Trustee Divestiture Period in order to 
facilitate each other's tasks.  
Duties and obligations of the Divestiture Trustee  
32. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum price 
the Divestment Business to a purchaser, provided that the Commission has approved both 
the purchaser and the final binding sale and purchase agreement (and ancillary 
agreements) as in line with the Commission's Decision and the Commitments in accordance 
with paragraphs 17 and 18 of these Commitments. The Divestiture Trustee shall include in 
the sale and purchase agreement (as well as in any ancillary agreements) such terms and 
                                                 
1 Subject to the Commission’s view and final decision on the necessity of involving the Technical Expert.  
 
13 conditions as it considers appropriate for an expedient sale in the Trustee Divestiture 
Period. In particular, the Divestiture Trustee may include in the sale and purchase 
agreement such customary representations and warranties and indemnities as are 
reasonably required to effect the sale. The Divestiture Trustee shall protect the legitimate 
financial interests of the Parties, subject to Takeda’ s uncond itional obligation to divest at no 
minimum price in the Trustee Divestiture Period.  
33. In the Trustee Divestiture Period (or otherwise at the Commission’ s request), the Divestiture 
Trustee shall provide the Commission with a comprehensive monthly report writt en in 
English on the progress of the divestiture process. Such reports shall be submitted within 15 
days after the end of every month with a simultaneous copy to the Monitoring Trustee and a 
non-confidential copy to the Parties.  
III. Duties and obligations of the Parties  
34. The Parties shall provide and shall cause their advisors to provide the Trustee and the 
Technical Expert with all such co- operation, assistance and information as the Trustee may 
reasonably require to perform its tasks. The Trustee and the Technical Expert shall have full 
and complete access to any of the Parties or the Divestment Business ’s books, records, 
documents, management or other personnel, facilities, sites and technical information 
necessary for fulfilling its duties under the Commitme nts and the Parties and the Divestment 
Business shall provide the Trustee and the Technical Expert upon request with copies of any 
document. Takeda and the Divestment Business shall make available to the Trustee and the 
Technical Expert one or more offices  on their premises and shall be available for meetings 
in order to provide the Trustee and the Technical Expert with all information necessary for 
the performance of its tasks.  
35. The Parties shall provide the Monitoring Trustee with all managerial and admini strative 
support that it may reasonably request on behalf of the management of the Divestment 
Business. This shall include all administrative support functions relating to the Divestment 
Business which are currently carried out at headquarters level. The P arties shall provide 
and shall cause their advisors to provide the Monitoring Trustee, on request, with the 
information submitted to potential purchasers, in particular give the Monitoring Trustee 
access to the data room documentation and all other information granted to potential 
purchasers in the due diligence procedure. The Parties shall inform the Monitoring Trustee 
on possible purchasers, submit lists of potential purchasers at each stage of the selection 
process, including the offers made by potential  purchasers at those stages, and keep the 
Monitoring Trustee informed of all developments in the divestiture process.  
36. Takeda shall grant or procure Affiliated Undertakings to grant comprehensive powers of 
attorney, duly executed, to the Divestiture Trustee to effect the sale (including ancillary 
agreements), the Closing and all actions and declarations which the Divestiture Trustee 
considers necessary or appropriate to achieve the sale and the Closing, including the 
appointment of advisors to assist with th e sale process. Upon request of the Divestiture 
Trustee, Takeda shall cause the documents required for effecting the sale and the Closing to 
be duly executed.  
37. Takeda shall indemnify the Trustee and its employees and agents and the Technical Expert 
(each an “Indemnified  Party ”) and hold each Indemnified Party harmless against, and 
hereby agrees that an Indemnified Party shall have no liability to Takeda for, any liabilities 
arising out of the performance of the Trustee’ s and the Technical Expert ’s duties und er the 
Commitments, except to the extent that such liabilities result from the wilful default, 
 
14 recklessness, gross negligence or bad faith of the Trustee, the Technical Expert, its 
employees, agents or advisors.  
38. At the expense of Takeda, the Trustee may appoint advisors (in particular for corporate 
finance or legal advice), subject to Takeda’ s approval (this approval not to be unreasonably 
withheld or delayed) if the Trustee considers the appointment of such advisors necessary or 
appropriate for the perform ance of its duties and obligations under the Mandate, provided 
that any fees and other expenses incurred by the Trustee are reasonable. Should Takeda 
refuse to approve the advisors proposed by the Trustee the Commission may approve the 
appointment of such advisors instead, after having heard Takeda. Only the Trustee shall be 
entitled to issue instructions to the advisors. Paragraph 37 of these Commit ments shall 
apply mutatis mutandis. In the Trustee Divestiture Period, the Divestiture Trustee may use 
advisors who served Takeda during the Divestiture Period if the Divestiture Trustee 
considers this in the best interest of an expedient sale.  
39. The Parties  agree that the Commission may share Confidential Information proprietary to 
the Parties with the Trustee. The Trustee shall not disclose such information and the 
principles contained in Article 17 (1) and (2) of the Merger Regulation apply mutatis 
mutandi s. 
40. The Parties agree that the contact details of the Monitoring Trustee are published on the 
website of the Commission's Directorate- General for Competition and they shall inform 
interested third parties, in particular any potential purchasers, of the identity and the tasks of 
the Monitoring Trustee.  
41. For a period of 10 years from the Effective Date the Commission may request all information 
from the Parties that is reasonably necessary to monitor the effective implementation of 
these Commitments.  
IV. Replacemen t, discharge and reappointment of the Trustee  
42. If the Trustee ceases to perform its functions under the Commitments or for any other good 
cause, including the exposure of the Trustee to a Conflict of Interest:  
(a) the Commission may, after hearing the Trustee and the Parties, require Takeda to 
replace the Trustee; or  
(b) Takeda may, with the prior approval of the Commission, replace the Trustee.  
43. If the Trustee is removed according to paragraph 40 of these Commitments, the Trustee 
may be required to continue in its function until a new Trustee is in place to whom the 
Trustee has effected a full hand over of all relevant information. The new Trustee shall be 
appointed in accordance with the procedure referred to in paragraphs 19- 26 of these 
Commitments.  
44. Unless removed according to paragraph 42 of these Commitments, the Trustee shall cease 
to act as Trustee only after the Commission has discharged it from its duties after all the 
Commitments with which the Trustee has been entrusted have been implemented. 
However, the Commission may at any time require the reappointment of the Monitoring 
Trustee if it subsequently appears that the relevant remedies might not have  been fully and 
properly implemented.  
 
15 Section H.  The review clause  
45. The Commission may extend the time periods foreseen in the Commitments in response to 
a request from the Parties or, in appropriate cases, on its own initiative. Where the Parties 
request  an extension of a time period, they shall submit a reasoned request to the 
Commission no later than one month before the expiry of that period, showing good cause. 
This request shall be accompanied by a report from the Monitoring Trustee, who shall, at th e 
same time send a non- confidential copy of the report to the Parties. Only in exceptional 
circumstances shall the Parties be entitled to request an extension within the last month of 
any period.  
46. The Commission may further, in response to a reasoned reques t from the Parties showing 
good cause waive, modify or substitute, in exceptional circumstances, one or more of the 
undertakings in these Commitments. This request shall be accompanied by a report from 
the Monitoring Trustee, who shall, at the same time send a non -confidential copy of the 
report to the Parties. The request shall not have the effect of suspending the application of 
the undertaking and, in particular, of suspending the expiry of any time period in which the 
undertaking has to be complied with . 
Section I.  Entry into force  
47. The Commitments shall take effect upon the date of adoption of the Decision.  
duly authorised for and on behalf of Takeda Pharmaceutical Company Limited  
Date:  16 November 2018  
duly authorised for and on behalf of Shire  plc 
Date:  16 November 2018  
  
 
16 Schedule  
1. The Divestment Business as operated to date has the following legal and functional 
structure:  
(a) The Divestment Business forms part of Shire’ s Internal Medicine business unit, 
which encompasses gastrointestinal disease products, internal medicine products 
and pipeline assets;  
(b) SHP 647 is under development by Shire in accordance with […] rights granted to 
Shire by Pfizer under the Pfizer Agreement. SHP 647 is now undergoing seven 
Phase III clinical trials for UC and CD (the “ Clinical Trials ”) − with a […]2 − and 
[…]. […]3, Annexes 1 and 2 to this Schedule provide a description of the Clinical 
Trials with an indicative study timeline;  
(c) The manufacturing process of SHP 647 incorporates intellectual property rights […] 
and additiona l manufacturing and quality -control related know -how […];  
(d) The manufacturing of the finished SHP 647 is […] ;4 
(e) The Clinical Trials are conducted for Shire in external medical institutions on a 
global basis;  
(f) Shire has […] ; 
(g) The development of SHP 647 is supported within Shire’ s organisation by a number 
of Affiliated Undertakings . […]. 
2. In accordance with Section B, paragraph 5 of these Commitments and subject to the 
Purchaser ’s option to agree with the Parties on a licence back to the Parties in respect of  
the right to manufacture and market SHP 647 in territories outside the EEA, the 
Divestment Business includes but is not limited to:  
(a) The following main tangible assets (together with the intangible assets listed below 
the “Transferred Assets”):  
(i) All relevan t reports, data and analysis for the Clinical Trials including those 
resulting from the preclinical studies, in particular but not limited to the 
preclinical toxicology package, and including all reports on studies 
undertaken in relation to the mechanism of action, all relevant study plans 
and results for […] and the Clinical Study, and all relevant study plans for 
[…]; 
(ii) Inventories of SHP 647 for use in the ongoing Clinical Trials, including raw 
materials, work in progress, drug substance (including SHP 647 API) and 
drug product, owned by and in the possession or control of Shire or 
Affiliated Undertakings;  
(iii) All relevant regulatory files, including but not limited to the following: the 
current investigator brochure, the investigational medicinal product dossier 
(IMPD ) and the protocol for the Clinical Trials and the Clinical Study, […], 
                                                 
2 For development for use in the treatment of UC and CD, […].  
3 […].  
4  […]. 
 
17 the Statistical Analysis Plan ( SAP); minutes and correspondence regarding 
interactions with the regulators regarding SHP 647, including the scientific 
advice from the regulators;  
(iv) All relevant books and records relating exclusively or predominantly to SHP 
647; the books and records relating to SHP 647 that also relate to other 
products developed or to be developed by Shire or its Affiliated 
Undertakings, shall only be transf erred to the extent that they relate to SHP 
647, it being understood that the other sections shall be redacted prior to 
the transfer to the Purchaser;  
(v) All documents, including but not limited, to the marketing plans and 
forecasts which are specific for SHP  647; the marketing plans and 
forecasts that also relate to other products developed or to be developed 
by Shire or its Affiliated Undertakings, shall only be transferred to the extent 
that they relate to SHP 647, it being understood that the other sections 
shall be redacted prior to the transfer to the Purchaser;  
(vi) Any other assets identified by the Purchaser and the Parties in the asset 
purchase agreement or in the Variation Agreement as overseen by the 
Monitoring Trustee.  
(b) The following main intangible ass ets: 
(i) Right to conduct the Clinical Trials, […]  and the Clinical Study, […], and 
rights to develop SHP 647 globally;  
(ii) Right to manufacture, have manufactured and market SHP 647 globally;  
(iii) Sponsorship of any and all current Clinical Trials and Clinical Study 
authorisations or other regulatory filings for SHP 647, including in relation to 
[…]5; 
(iv) Patents and patent applications (as listed in Annex 3), copyrights, data and 
know -how (including but not limited to the manufacturing and quality -control 
related know -how developed for SHP 647) existing as of the Closing date 
and relating exclusively or predominantly to the clinical development, 
manufacture or sale of SHP 647 (the “ In-Scope IP ”), subject to a non-
exclusive, perpetual, irrevocable, royalty -free license- back to the Parties of 
any such rights that are shared with any Shire retained business; patents 
and patent applications, copyrights, data and know -how existing as of the 
Closing date that are not predominantly relating to the clinical development, 
manufactur e or sale of SHP 647, will be subject to a non- exclusive, 
perpetual, irrevocable, royalty -free licence.  
(v) The proposed “ Ontamalimab” International Nonproprietary Name (“INN ”), 
the proposed trade name […] , prospective design rights and trademarks for 
the SHP 647 compound and the domain names listed in Annex 4.  
(vi) Subject to having obtained all required regulatory and data protection 
consents, the Clinical Trials databases, which will be transferred at a date 
                                                 
5 […].  
 
18 to be mutually agreed by the Purchaser and the Parties , as overseen by 
the Monitoring Trustee.  
(c) The following main licences, permits and authorisations:  
(i) The assignment of Shire’ s rights under of the Pfizer Agreement and in 
accordance with its terms. […]; 
(ii) All licences, permits and authorisations issued by any g overnmental 
organisation for the benefit of the Divestment Business. Since SHP 647 is 
still in the clinical trial phase, no permits or authorisation have been granted 
yet in relation to SHP 647, other than the authorisations with respect to the 
Clinical Tr ials and the […]. Similarly, no permits or authorisations have been 
granted yet in relation to […] . 
(d) The following main contracts, agreements, leases, commitments and 
understandings:  
(i) Contracts with third parties existing as of the Closing date to the extent 
relating exclusively or predominantly to the development, manufacture and 
marketing of SHP 647. A list of the key third party contracts is attached in 
Annex 5 . The Parties undertake to use best efforts to obtain all necessary 
third party consents where applicable. To the extent any such third party 
consent could not be obtained, or any other contract could not be otherwise 
transferred, the Parties will, as appropriate, either work with the Purchaser 
and relevant third party to put in place arrangements to transfer any work 
product and work in process and support the Purchaser to put in place 
alternative arrangements, or seek to enter into, for a transitional period of 
up to […] , back -to-back agreements with the Purchaser on the same terms 
and conditions of  the contracts for which the third party consent could not 
be obtained, or of the contracts which could not be transferred. The […]  
period may be extended by the Monitoring Trustee for a further period of up 
to […] if the Purchaser demonstrates delays in s ecuring regulatory 
approvals required to market SHP 647 in an EEA country.  
(e) The following customer, credit and other records:  
(i) Since SHP 647 is still in clinical trial phase, it is not yet being supplied for 
commercial use to customers;   
(ii) The Parties will provide the full list of Key Opinion Leaders for SHP 647 on 
the date of Closing to the Purchaser.  
(f) The Key Personnel listed in Annex 6 . 
(g) The Personnel listed in Annex 7. For a period of […] after Closing, the Purchaser 
shall have the opportunity to interview  such employees and enter into employment 
contracts with employees (should the SHP 647 Purchaser wish to do so).  
(h) The arrangements for the supply with the following products or services by the 
Parties:  
(i) The arrangements for the provision of transitional ser vices at cost, for a 
transitional period of up to […]  after Closing, including technical assistance, 
that are currently supplied by Shire to the Divestment Business. At the 
 
19 Purchaser ’s request, this period can be extended for a mutually agreed 
period as ov erseen by the Monitoring Trustee;  
(ii) In addition to the SHP 647 API which is being transferred as part of the 
inventory, and at the option of the Purchaser, the Parties shall enter into a 
transitional supply agreement for the SHP 647 API for up to […]. Such 
transitional arrangement will be at cost and shall include appropriate 
provisions designed to ensure the continued supply by the Parties to the 
Purchaser;  
(iii) At the option of the Purchaser, reasonable support to the Purchaser, or its 
designated third- party or ganisation, in qualifying and gaining regulatory 
approvals for the manufacturing of SHP 647;  
(iv) The arrangements for the Parties to continue to act as a sponsor for all 
clinical trials underway for a period until Closing, it being understood that 
the Parties  will continue all activities related to those clinical trials according 
to the plans existing at the Effective Date, in particular as set out in the 
schedule of milestones attached as Annex 2 ,  as overseen by the 
Monitoring Trustee. At the Purchaser ’s req uest, with respect to any clinical 
trial, the above- mentioned period can be extended for a mutually agreed 
period, subject to a reasonable service fee to be agreed with the 
Purchaser, as overseen by the Monitoring Trustee;  
(v) In addition, at the request of t he Purchaser, the Parties, will undertake the 
transfer of SHP 647 manufacturing technology (i.e., the manufacturing and 
quality -control related know -how developed for SHP 647) to a facility of the 
Purchaser ’s choice in order to enable the Purchaser to manufacture SHP 
647 or have it manufactured at launch of SHP 647 at the latest. At the 
request of the Purchaser, Shire will also assist the Purchaser in transferring 
technical information and know -how to the Purchaser itself or to a potential 
third party manuf acturer; and  
(vi) Until closing of the Takeda/Shire Transaction, Shire will continue in full all 
its interactions with […] in relation to SHP 647, and commits to support the 
ongoing work of […] in the way provided for in the contracts concluded 
between Shire a nd […] and in the spirit of this pre -existing commercial 
arrangement. In particular, and in accordance with the relevant contractual 
delegation of responsibilities,  Shire will provide all information required by 
[…], respond promptly to enquiries including those related to safety, 
pharmacovigilance and medical monitoring, review, contribute to and 
approve reports  where appropriate, provide approvals where needed, take 
responsibility for decisions deferred to it, support Shire staff working with 
[…], conduct  oversight and monitoring activities, draft and submit , or cause 
to be submitted,  submissions to health authorities as appropriate, manage 
matters related to site agreements, providing content for regulatory 
documentation, and carry out any other duties relating to its cooperation 
with […] in the way it would have done prior to any consideration of 
divesting the SHP647, in line with standard practice and as overseen by 
the Monitoring Trustee. Following closing of the Takeda/Shire Transaction, 
Takeda will fulfil all the duties as described in this paragraph, as overseen 
 
20 by the Monitoring Trustee, until Closing or otherwise agreed in line with 
paragraph 2(h)(iv) of this Schedule to the extent applicable.  
(vii) Prior to the closing of the Takeda/Shire Transaction, Shire commits to 
finalize […] in cooperation with […], in a manner  that […] can 
continue […] during the transitional period as originally scheduled with 
Shire prior to the Effective Date.  For the avoidance of doubt, the 
Purchaser shall be free to […] . 
3. In the  event that materials to be transferred contain information that is confidential to the 
Parties ’ retained businesses and not relevant for the Divestment Business, the information 
shall be redacted as appropriate.  The Divestment Business shall not include:  
(a) any right, title or interest in or to any of the assets of Shire or Affiliated 
Undertakings other than those specified in paragraph 2  of this Sched ule and, for 
the avoidance of doubt, will not include:  
(i) the name “Shire ”, together with all variations thereof and all trademarks, 
service marks, domain names, trade names, trade dress, corporate names, 
logos and other identifiers of source containing, inc orporating or associated 
with any of the foregoing, save as provided for in paragraph 2 of this 
Schedule;  
(ii) any plant, tangible property or equipment  of Shire or Affiliated 
Undertakings;  
(iii) any right to manufacture, market or sell any product other that SHP 647 or 
any license to use any asset of Shire in connection with any product other 
than SHP 647;  
(iv) any asset that is not a Transferred Asset and any asse t that does not relate 
to the clinical development or sale of SHP 647; and  
(v) accounts receivable, pre- paid expenses and any case or cash equivalents 
of Shire or Affiliated Undertakings.  
(b) In the event that the Parties and the Purchaser agree on a licence back to the 
Parties in respect of the right to manufacture and market SHP 647 in territories 
outside the EEA, the relevant rights, title and interests in SHP 647s in territories 
outside the EEA, or ancillary assets and the rights to or license for certain 
technologies, needed to manufacture and market SHP 647 in territories outside the 
EEA. For the avoidance of doubt, the Purchaser shall remain free to manufacture or 
have manufactured SHP 647 (including its active ingredient) at one or more 
facilities, of its ow n or of a third party, of its choice.  
4. The Parties commit that the assets to be transferred are sufficient for the Purchaser to 
continue the development and, depending on the outcome of the clinical trials, ultimately 
commercialise SHP 647, enabling the Pur chaser to operate the Divestment Business as a 
viable and independent business in the EEA.  
5. If there is any asset or personnel which is not be covered by paragraph 2 of this Schedule 
but which is both used (exclusively or not) in the Divestment Business and necessary for 
the continued viability and competitiveness of the Divestment Business, that asset or 
adequate substitute will be offered to potential purchasers, by transfer or license, as 
appropriate as overseen by the Monitoring Trustee.  
 
21 Annex 1  
Shire Sponsored Clinical Trials for SHP 647  
NCT Number / Sponsor's 
Protocol Code Number / 
EudraCT Number  Description  Condition 
studied  Phase  
NCT03283085 / SHP647- 304 / 
2017-000574-11  A Safety Extension Study of SHP647 in 
Subjects With Moderate to Severe 
Ulcerative Colitis or Crohn's Disease 
(AIDA) CD 
UC Phase III  
NCT03627091 / SHP647- 307 Efficacy and Safety of SHP647 as 
Maintenance Treatment in Participants 
With Moderate to Severe Crohn's Disease 
(CARMEN CD 307)  CD Phase III  
NCT03566823 / SHP647- 306 Efficacy and Safety Study of SHP647 as 
Induction Therapy in Participants With 
Moderate to Severe Crohn's Disease 
(CARMEN CD 306)  CD Phase III  
NCT03559517 / SHP647- 305 Efficacy and Safety Study of SHP647 as 
Induction Therapy in Participants With 
Moderate to Severe Crohn's Disease 
(CARMEN CD 305)  CD Phase III  
NCT03290781 / SHP647- 303 / 
2017-000573-37  Study of the Effect of SHP647 as 
Maintenance Treatment in Participants 
With Moderate to Severe Ulcerative 
Colitis Who Achieved Clinical Response 
in Induction Studies  UC Phase III  
NCT03259334 / SHP647- 301 / 
2017-000599-27  A Phase 3 Randomized, Double-blind, 
Placebo-controlled, Parallel -group 
Efficacy and Safety Study of SHP647 as 
Induction Therapy in Subjects With 
Moderate to Severe Ulcerative Colitis 
(FIGARO UC 301)  UC Phase III  
NCT03259308 / SHP647- 302 / 
2017-000572-28  A Phase 3 Randomized, Double-blind, 
Placebo-controlled, Parallel -group 
Efficacy and Safety Study of SHP647 as 
Induction Therapy in Subjects With 
Moderate to Severe Ulcerative Colitis 
(FIGARO UC 302)  UC Phase III  
 
  
 
22 Annex 2  
Indicative SHP 647 Study Timeline  
[…] 
  
 
23 Annex 3  
SHP 647 Patents and patent applications*  
[…] 
* […]  
  
 
24 Annex 4  
Domain Names  
[…] 
  
 
25 Annex 5  
List of key identified third party contracts  
1. Unless otherwise specified in the table below, master agreements are […]. Many of Shire’s 
Statement of Works (“ SOWs ”) relating to the SHP647 program […].  Similarly, each SOW 
must have […].  
2. Where contracts that cannot be assigned to the Purchaser pursuant to their terms or 
because the scope of the contract includes products or services not related to the Product, 
the Parties will use their best efforts to assist the Purchaser in putting in place appropriate 
alternative arrangements with the relevant third parties, for example:  
a. entering into back -to-back agreements; or  
b. as Shire has done previously, work with the relevant counterparty and the 
Purchaser to put in place a new master agreement, and then transfer ownership 
of any work product and work in process under a SOW to the Purchaser. The 
Partie s would then support the Purchaser in putting in place alternative 
arrangements specific to the ongoing development of the Product, such as an 
equivalent SOW.6 
3. Aside from master agreements and SOWs, there are various other ancillary agreements 
relating to the SPH647 program, such as Clinical Trial Agreements and patient Informed 
Consents7. […].   
A. Key supply contracts  
[…]8 
B. List of active MAdCAM Clinical Trial Agreements  
[…] 
  
                                                 
6  For raw material contracts, the Parties would seek to transfer the relevant specification and approved 
vendor informat ion to the Purchaser. As appropriate, the Parties will use best efforts to assist the 
Purchaser in putting in place appropriate agreements with the relevant third parties.  
7  A list of active Clinical Trial Agreements is provided at “B” below.  
8  […].  
 
26 Annex 6  
Key Personnel  
Name  Role  Location  Allocation of 
time spent on 
SHP 647  
[…] Inflammatory Bowel Disease (“IBD ”): 
Product Strategy Lead  
[…]9: New Products Lead  […] […] 
[…] Global Development Lead  […] […] 
[…] Global Clinical Development Lead -  UC […] […] 
[…] Global Clinical Development Lead -  CD […] […] 
[…] Biostatistics Project Lead  […] […] 
[…] Global Program Manager  […] […] 
[…] IBD: Global Regulatory Lead 
[…]: Regulatory Affairs  […] […] 
[…] Clinical Pharmacology Lead/Global 
Clinical Operations Lead  […] […] 
[…] IBD: Chemistry Manufacturing &Control  
[…]: Technical Operations  […] […] 
 
  
                                                 
9  […].  
 
27 Annex 7  
List of Personnel for SHP647 program10 
[…] 
                                                 
10 […].