Shire agrees to buy NPS Pharma at $46 per share, further strengthening their rare disease pipeline
After links between Shire and NPS Pharmaceuticals surfaced back in May 2014, Shire has announced their agreement to buy NPS Pharma for $5.2 billion dollars. The move will strengthen Shire’s position as a leading developer in the rare disease space. This move by shire will no doubt put an end to speculation that Shire might attempt to merge with another big pharma player, after Abbvie’s failed attempt in 2014 which earnt Shire a $1.6 billion windfall from Abbvie.
Shire acquisition of NPS will provide them with NPS’ Gattex, an approved treatment for short-bowel syndrome, and Natpara, a hypoparathyroidism treatment set to receive an opinion from the FDA on the 24th of Jan. In reference to the coming opinion on Natpara, NPS CEO Francois Nader has said that, whilst there are no guarantees, ‘given our interactions with the FDA, I believe it will be approved.’ Nader further added that Shire’s decision to execute the deal prior to approval was a calculated move which will give NPS greater resources to support the launch of the product.
Reuters reports that by 2019 Gattex and Natpara are expected to be worth $509 million and $534 million respectively in annual sales, figures that can be achieved thanks the higher pricing found typically held by orphan drugs. Whilst Shire predicts cost savings of between 25% to 35% on NPS future operating costs. Put together analysts from Jefferies suggest that earnings per share could increase by 12% in 2016.