North American Report

Shire to buy NPS for $5.2 billion

Shire to buy NPS for $5.2 billion

The pharmaceutical buying binge continues globally in 2015. Shire PLC, an Irish-based drugmaker, has agreed to acquire New Jersey-based NPS Pharmaceuticals for about $5.2 billion. Shire executives said the company wants to bolster its rooster with medicines used to treat rare diseases.1405339841000-XXX-20140708-UK-SHIRE-PLC-APS-155-65833042

The move follows a slew of major pharmaceutical deals in 2014 — which now appear to be carrying over into 2015.The deals have been driven by different catalysts — some by tax inversions; some by the growing need for biotech expansion and some by both. Last year, German drugmaker Merck KGaA’s bought U.S. life sciences firm Sigma-Aldrich Corp. for $17 billion. Chicago-based AbbVie Inc. agreed to buy Ireland’s Shire for $54 billion. And United Kingdom-based drugmaker GlaxoSmithKline and Swiss firm Novartis swapped some businesses in a $20 billion deal.

There’s more. Dublin-based Actavis PLC agreed to acquire rival drugmaker Forest Labs in a $25 billion cash-and-stock deal. And last year, German pharmaceutical company Bayer AG agreed to buy Merck & Co.’s consumer-health unit for about $14 billion. The latest deal, which has been approved by both companies, isn’t cheap. Shire will pay $46 a share in cash, the company said today in a statement. That’s a 9.8% premium to NPS’s closing share price on Jan. 9. It allows Shire to quickly expand in rare diseases such as gastrointestinal and endocrine disorders.

But the timing of the deal is critical. The U.S. Food and Drug Administration has yet to approve NPS’ medicine named Natpara, which is used to treat a potentially fatal disorder called hypoparathyroidism. That decision isn’t scheduled until later this month. Natpara would be the first treatment marketed for the disease. “The acquisition of NPS Pharma is a significant step in advancing Shire’s strategy to become a leading biotechnology company,” said Shire’s CEO Flemming Ornskov, in a statement. Meanwhile, Francois Nader, CEO of NPS Pharma, said, in a statement, that the transaction “will accelerate our ambition of creating a world where every person living with a rare disease has a therapy.”

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