Shire takes $5bn gamble on NPS' hormone replacement PDUFA decision

12-Jan-2015 - Last updated on 12-Jan-2015 at 10:56 GMT

$5.2bn deal comes days before US FDA's PDUFA decision for NPS's hypoparathyroidism (HPT) candidate Natpara

Shire says its $5.2bn (€4.4bn) acquisition of NPS Pharmaceuticals is a calculated risk, coming just days before the US FDA decides whther to approve the hormone replacement therapy Natpara.

The deal will see Shire boost its position in the gastrointestinal (GI) disorders and rare disease market, adding NPS’s once-daily injection drug Gattex (teduglutide) for the treatment of patients with short bowel syndrome (SBS).

Gattex was approved in the US in December 2012 and in Europe in the third quarter, 2013, and worldwide sales for the first three quarters 2014 stood at $158m, and, in announcing the proposed acquisition, Shire CEO Flemming Ornskov said the firm was “uniquely positioned to drive the continued success” of the product.

“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.”

Almost a baked cake?

However, during a conference call Sunday, investors were concerned with the timing of the acquisition, announced days before a US Food and Drug Administration (FDA) decision as to the approval of NPS’ parathyroid hormone (rhPTH [1-84]) candidate Natpara, for the treatment of hypoparathyroidism (HPT), a rare endocrine disorder.

Ornskov admitted there was a risk involved, but told stakeholders Shire was confident in the data under review.

“This was a situation where in order for us to get this over the finish line that was the risk we had to take on,” he said on the call.

“If you look at history, companies that have taken calculated risk based on serious analysis of the situation are often very good deals,” he continued, citing Gilead’s $11bn acquisition of HCV drug developer Pharmasset in 2011 as an example. “This is almost a baked cake and gives us the opportunity to get in early.”

Gilead has gone on to launch the HCV drug Sovaldi which clocked in sales of $8.5bn for the first nine months of 2014.

Natpara has an FDA Prescription Drug User Fee Act (PDUFA) action date for the Biologics License Application (BLA) on January 24.