Shire to acquire NPS Pharma for $5.2 billion

DUBLIN & BEDMINSTER, N.J.—Although AbbVie Inc. and Shire PLC were unable to come to a final merger deal in October 2014  after the U.S. Treasury instituted new rules to discourage inversion deals, the termination of the deal did leave Shire with a breakup fee of $1.6 billion. An amount of money which no doubt is helping Shire as it makes its first deal since the aborted AbbVie one—this time, looking to acquire NPS Pharmaceuticals Inc., a commercial-stage rare disease-focused biopharmaceutical company, for $5.2 billion.

 

Under the deal, Shire will acquire all the outstanding shares of NPS Pharma for $46 per share in cash—a 51-percent premium to NPS Pharma's unaffected share price on Dec. 16, 2014—with Shire intending to “accelerate the growth of NPS Pharma's innovative portfolio through its market expertise in gastrointestinal (GI) disorders, core capabilities in rare disease patient management, and global footprint.”

 

The transaction has been approved unanimously by the boards of directors of both Shire and NPS Pharma.

 

NPS Pharma’s first product, Gattex/Revestive (teduglutide [rDNA origin]) for injection, is approved in the United States and Europe to treat adults with short bowel syndrome (SBS) who are dependent on parenteral support. NPS Pharma also has a registration-phase product, Natpara/Natpar (rhPTH [1-84]) for the treatment of hypoparathyroidism (HPT).

 

Shire maintains that the acquisition represents an “excellent strategic fit” by strengthening Shire's focus on rare diseases while leveraging industry-leading GI commercial capabilities. The increased global footprint Shire looks forward to is expected to enhance the revenue and earnings growth profile, and Shire expects the transaction to be accretive to non-GAAP earning per share from 2016 onward.

 

"The acquisition of NPS Pharma is a significant step in advancing Shire's strategy to become a leading biotechnology company,” said Shire's CEO, Dr. Flemming Ornskov. “With our global strength and expertise in both rare diseases and GI, Shire is uniquely positioned to drive the continued success of Gattex/Revestive, and, if approved, commercialize NPS Pharma's pipeline compound Natpara/Natpar. We look forward to accelerating the growth of the NPS Pharma portfolio based on our proven track record of maximizing value from acquired assets and commercial execution. The NPS Pharma organization will be a welcome addition to Shire as we continue to help transform the lives of patients with rare diseases."

 

Dr. Francois Nader, president, CEO and director of NPS Pharma, added, “Shire shares NPS Pharma's commitment to patients with rare diseases. We believe that joining our two companies will drive value for shareholders and ensure we continue to transform the lives of patients with short bowel syndrome, hypoparathyroidism, and autosomal dominant hypocalcemia worldwide. I am confident that this transaction will accelerate our ambition of creating a world where every person living with a rare disease has a therapy. I would like to thank all of our employees for their continued outstanding contributions and steadfast commitment to the patients we serve."

 

NPS Pharma, which has an operational presence in the United States, Canada, Europe, Latin America and Japan, has—in addition to the other candidates mentioned above—an ongoing Phase 2a study evaluating its lead pipeline candidate NPSP795 for the treatment of adults with autosomal dominant hypocalcemia. The value of NPS Pharma's gross assets were $282.2 million with net assets totaling $130.9 million as of Sept. 30, 2014. NPS Pharma's losses before tax for the three and nine month periods ending Sept. 30, 2014 were $1.9 million and $6.2 million, respectively. 

 

Gattex is the first analog of GLP-2 approved to treat SBS, a disease which may require patients to get their nutrition intravenously through a central line (parenteral support). SBS is a condition in which a large portion of the intestine has been removed by surgery. As a result, people can't absorb enough nutrients or fluids from food and liquids to maintain good health. It can also be caused by disease or injury that prevents the small intestine from functioning properly despite normal length. In the United States, some 6,000 to 7,000 SBS patients are dependent on parenteral support, with a similar prevalence in Europe.

 

Gattex has received orphan drug designation from the U.S. Food and Drug Administration (FDA) and was approved in December 2012. Gattex generated sales of $67.9 million in the nine months ending Sept. 30, 2014.

 

In Europe, the drug is known as Revestive and has been launched in Germany and Sweden.

 

Natpara/Natpar, NPS Pharma's parathyroid hormone for the treatment of HPT, a rare endocrine disorder characterized by insufficient levels of parathyroid hormone (PTH), is currently under review in the United States with an FDA Prescription Drug User Fee Act (PDUFA) action date for the Biologics License Application (BLA) on Jan. 24. In Europe, the European Medicines Agency has validated and initiated its review of NPS Pharma's marketing authorization application for Natpar.

 

HPT is a rare condition in which the parathyroid glands fail to produce sufficient amounts of PTH or where PTH lacks biologic activity. PTH plays a central role in a variety of critical physiological functions in the body. In patients with HPT, insufficient levels of PTH lead to many physiological abnormalities, including low serum calcium and an inability to convert native vitamin D into its active state to properly absorb dietary calcium. In the United States, approximately 75,000 patients are diagnosed with HPT, with 41,000 having moderate to severe disease, with a similar prevalence in the European countries of France, Germany, United Kingdom, Italy and Spain. Acute symptoms of HPT are largely due to low serum calcium and range from muscle pain and tingling, to lack of focus or ability to concentrate, and anxiety and depression.

 

In extreme cases, life-threatening events, such as arrhythmias and seizures, may occur. In the absence of an approved parathyroid replacement therapy, the standard approach focuses on using large doses of calcium and active vitamin D to increase calcium levels in the blood and reduce the severity of symptoms. However, balancing the administration of large doses of calcium and vitamin D is challenging due to calcium fluctuations and the long-term use of this regimen may lead to serious complications. In addition, calcium and vitamin D do not correct the abnormal bone metabolism due to PTH deficiency or enable the activation of vitamin D.

 

We will have more coverage of this deal and its implications in the February issue of DDNews.