Shire signs deal to buy NPS for $5.2bn

UK pharma company Shire has boosted its position in the rare disease sector with a $5.2bn deal to acquire US rival NPS.

Shire is paying $46 per share in cash for NPS - around $3 above its closing share price on Friday but a 51% premium on the stock in mid-December, when rumours of a bid merger between the two companies first surfaced.

The acquisition announcement comes three months after AbbVie's $55bn takeover bid for Shire was scuppered by a clampdown on tax inversion deals by the US government.  

Shire chief executive Flemming Ornskov said that the combined company would be able to drive sales of NPS' rare gastrointestinal (GI) disease therapy Gattex/Revestive (teduglutide), a GLP-2 analogue approved in the US for short bowel syndrome in 2012.  

Gattex generated sales of just under $68m in the first nine months of 2014 and has only been launched in Germany and Sweden in Europe, where it was formerly licensed to Takeda's Nycomed subsidiary. SBS results from surgery of the small intestine and is associated with life-threatening complications, including infections, blood clots, and liver damage.

The drug could benefit from Shire's marketing muscle on both sides of the Atlantic, said Ornskov, and could soon be joined by Natpara/Natpar (recombinant parathyroid hormone) for the treatment of hypoparathyroidism, which could be approved later this month in the US and in early 2016 in the EU.

If approved, Natpara would be the only bioengineered hormone replacement therapy indicated for the use of HPT, which is currently managed - often ineffectively - using high-dose oral calcium and vitamin D supplements.

"These are two exciting, promising products that we are confident we can bring value to through our GI and rare disease expertise," said Ornskov on a conference call with analysts yesterday, saying that Shire's GI sales team is ranked number two in the US.

Also in NPS' pipeline is NPSP795, a small-molecule antagonist of the calcium-sensing receptor in mid-stage clinical trials for patients with autosomal dominant hypocalcemia (ADH), an ultra-rare disorder with no approved therapies. Data from a proof-of-concept trial is due sometime after the first quarter of this year.

Shire said it expected to have a 'mild' operating impact from the deal next year, accoridng to Shire's chief financial officer Jeff Poulton, with cost-savings starting to come through in 2016 and onwards, although the company said it would not give details until its year-end conference in February.

The companies were also not prepared to speculate on the peak sales potential for Gattex and Natpara with the added benefit of Shire's involvement.

Previously, NPS has predicted that sales of Gattex could reach $350m while Natpara could bring in around $250m, although some analysts are more optimistic and have suggested $750m to $1bn for the latter drug might be achievable.