Shire to buy NPS for $5.2 billion to boost rare disease drugs

Sun Jan 11, 2015 3:27pm EST
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By Ben Hirschler

LONDON (Reuters) - Shire Plc has agreed to buy NPS Pharmaceuticals Inc for $5.2 billion in its biggest acquisition yet, as the Dublin-based drugmaker strengthens its position in the lucrative field of medicines for rare diseases.

The takeover continues the breakneck pace of deal-making in 2014 in the pharmaceuticals sector, as companies jockey for promising assets amid a wave of new drugs emerging from research laboratories.

Shire Chief Executive Officer Flemming Ornskov told Reuters he would keep looking for more deals to grow the company into a biotech powerhouse.

Shire will pay $46.00 per NPS share, representing a premium of nearly 10 percent to NPS' Friday close, the two companies said on Sunday.

The move will not come as a huge surprise, since Shire was first linked to NPS in May 2014. When plans for Shire to sell itself to AbbVie Inc fell apart in October, Shire said it could look again at earlier deal prospects and reports of Shire's interest resurfaced in mid-December.

"This is about growth and rare diseases, and it fits hand in glove with our strategy and our franchise," Ornskov said.

Shire expects the all-cash deal to add to its adjusted earnings from 2016 onward. It believes it can achieve cost savings of approximately 25 percent to 35 percent of consensus forecasts for NPS' standalone future operating cost base from 2017.

The acquisition of New Jersey-based NPS will give Shire two significant new drugs. Gattex, a treatment for short-bowel syndrome, is already on the market, while Natpara, for hypoparathyroidism, is awaiting approval from the U.S. Food and Drug Administration.   Continued...

A sign sits in front of Shire's manufacturing facility in Lexington, Massachusetts July 18, 2014.    REUTERS/Brian Snyder