Shire acquires specialty drug maker NPS Pharma for $5.2 bn

Irish pharmaceutical giant Shire Plc is buying leading US biotech firm NPS Pharmaceuticals Inc for approximately $5.2 billion in cash, aiming to strengthen its global footprint in biotechnology through increased focus on rare diseases and treatment of gastro intestinal (GI) disorders.

Under the terms of the deal, Shire will acquire all the outstanding shares of New Jersey-based NPS Pharma for $46 a share representing a 51-per cent premium to NPS's share price of 16 December, before the rumours of a possible merger broke out. (See: Shire weighs bid for rare disease specialist NPS Pharmaceuticals)

The announcement is the first major corporate takeover deal of the year signalling continued global consolidation of drug companies.

The move comes just three months after US drug major AbbVie Inc dropped plans of buying Shire for $55 billion after the US Treasury changed tax rules to prevent so called ''corporate inversions.'' (See: AbbVie calls off $55-bn acquisition of Shire over US tax rules)

NPS Pharma is a rare disease-focused biopharmaceutical company and its first drug, Gattex / Revestive injectibles, is approved in the US and Europe to treat adults with short bowel syndrome who are dependent on parenteral support. It is estimated that there are approximately 6,000-7,000 such patients in the US with a similar prevalence in Europe.

The biotech firm also has a registration phase product, Natpara/Natpar for the treatment of hypoparathyroidism (HPT), a rare condition when human body produces abnormally low levels of parathyroid hormone which is crucial to maintaining the calcium and phosphorous levels in the body.

In the US, approximately 75,000 patients are diagnosed with HPT with 41,000 having moderate to severe disease with a similar prevalence in France, Germany, the UK, Italy and Spain, according to Shire.

NPS Pharma's lead pipeline candidate is a drug being developed for the treatment of autosomnal dominant hypocalcemia, an ultra-rare, life-long genetic disorder which has no approved therapy at present.

Shire's chief executive officer, Flemming Ornskov, said, ''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, commercialise NPS Pharma's pipeline compound Natpara / Natpar.''

Francois Nader, president, chief executive officer of NPS, commented, ''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.''

The transaction, approved by the boards of directors of both the companies, is expected to close in the first quarter of 2015, subject to regulatory clearances and customary closing conditions.

Shire intends to fund the purchase through cash in hand and bank facilities, which include an $850 million fully underwritten short-term credit and existing $2.1 billion five-year revolving credit facility.

Shire expects the acquisition will yield enhanced revenue and earnings growth through operational synergies. The transaction is expected to be accretive to its earnings from 2016 onward.

As of end of September 2014, NPS Pharma's assets were $282 million. The company has incurred a $6.2-million loss for the nine-month period ended September.

NPS currently has several partnerships for its drugs in the US, EU, Japan, Hong Kong, Malaysia, Macau, Singapore and Taiwan and the list of companies include prominent names such as Amgen, GlaxoSmithKline, Janssen Pharmaceuticals and Kyowa Hakko Kirin.

The drug maker earned royalty revenues of $89.5 million in the first three quarters of 2014.

Citigroup Global Markets Ltd and Lazard are acting as joint financial advisors to Shire on the deal, while NPS Pharma is advised by Goldman, Sachs & Co and Leerink Partners LLC.