Shire Hunt for Next Target Spotlights PTC to Synageva: Real M&A
2015-01-12 19:29:06.901 GMT
(For a Real M&A column news alert: SALT REALMNA <GO>.)
By Tara Lachapelle
(Bloomberg) -- Shire Plc just announced its biggest
takeover yet, and it’s already hinting at another one.
The Dublin-based drugmaker is buying NPS Pharmaceuticals
Inc. for $5.2 billion, just one year after completing the $4.2
billion purchase of ViroPharma Inc. Given the cash Shire
generates -- about $400 million per quarter on average -- this
latest transaction won’t limit the $42 billion company from
pursuing future deals, which it needs to become a leader in
biotechnology, Chief Executive Officer Flemming Ornskov said in
an interview.
Shire’s takeover criteria continue to include high-margin
treatments for rare diseases, particularly already-approved or
late-stage products. With the $1.6 billion breakup fee it
received when AbbVie Inc. dropped a plan to buy the company late
last year, Shire’s financial leverage will be relatively low,
according to CRT Capital’s Timothy Chiang.
“Their balance sheet is still relatively clean,” Chiang
said in a phone interview from Stamford, Connecticut. “M&A
remains a recurring theme.”
Here are a handful of drug developers with products in the
later stages of the testing and approval process that are valued
at $100 million to $10 billion, according to data compiled by
Bloomberg:
PTC THERAPEUTICS INC. -- The $1.8 billion company applied last
month for U.S. Food and Drug Administration approval to market
its treatment Translarna for a rare genetic muscle disorder
called nonsense mutation Duchenne muscular dystrophy. It is
already approved in the European Union and has been granted
orphan-drug status in both regions, which extends its market
exclusivity. Revenue at South Plainfield, New Jersey-based PTC
is projected by analysts to surge to more than $500 million by
2018 before topping $1 billion beginning in 2020.
SYNAGEVA BIOPHARMA CORP. -- Shares of Lexington, Massachusetts-
based Synageva have surged 53 percent since early November, when
it reported positive phase 3 study data for its drug for
lysosomal acid lipase deficiency, which can cause cirrhosis of
the liver and accelerate atherosclerosis. The $4 billion company
requested a priority review from the FDA, which would shorten
the agency’s decision time to 8 months from about a year.
Analysts forecast more than $500 million in sales starting in
2019.
RETROPHIN INC. -- A smaller candidate at just $363 million,
Retrophin has an orphan-designated treatment undergoing a phase
2 trial for focal segmental glomerulosclerosis, which can cause
kidney failure. It also has approved drugs for gallstones and
hypertension. Shares of the New York-based drug developer have
risen 18 percent in the past year.
ULTRAGENYX PHARMACEUTICAL INC. -- This $1.7 billion
biotechnology company focused on rare diseases is projected to
generate more than $500 million of annual revenue beginning in
2022. A phase 3 study is under way for its therapy for a
metabolic disorder that affects most tissues and organs, and can
cause stillborn babies and infant deaths. The Novato,
California-based drug developer also received orphan status for
treating a syndrome that causes the brain to not function
properly because it doesn’t get enough glucose.
Bigger Ambitions -- Should Shire desire a larger target,
BioMarin Pharmaceutical Inc. and Vertex Pharmaceuticals Inc. are
options. San Rafael, California-based BioMarin, valued at about
$14 billion, touched a record $98.63 Monday and has a slate of
experimental treatments for rare diseases and cancer. Revenue
may climb above $1 billion next year and then top $2 billion in
2019. At $29 billion, Boston-based Vertex would be an even
larger merger partner. It’s already generated more than $1
billion of annual sales and the stock has risen 53 percent in
the past year.
A representative for BioMarin said the company doesn’t
comment on speculation. Representatives for PTC, Synageva,
Retrophin, Ultragenyx and Vertex didn’t immediately respond to
requests for comment.
For Related News and Information:
Shire May Extend Takeovers After Buying NPS for $5.2 Billion
Drug Buying Spree Still Bustling as Pfizer Leads Hunt: Real M&A
Shire Said to Consider Bid for NPS as It Revisits Takeovers
Real M&A columns: NI REALMNA <GO>
Top deal stories: DTOP <GO>
Merger Calculator: MRGC <GO>
M&A Data: MA <GO>
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman
2015-01-12 19:29:06.901 GMT
(For a Real M&A column news alert: SALT REALMNA <GO>.)
By Tara Lachapelle
(Bloomberg) -- Shire Plc just announced its biggest
takeover yet, and it’s already hinting at another one.
The Dublin-based drugmaker is buying NPS Pharmaceuticals
Inc. for $5.2 billion, just one year after completing the $4.2
billion purchase of ViroPharma Inc. Given the cash Shire
generates -- about $400 million per quarter on average -- this
latest transaction won’t limit the $42 billion company from
pursuing future deals, which it needs to become a leader in
biotechnology, Chief Executive Officer Flemming Ornskov said in
an interview.
Shire’s takeover criteria continue to include high-margin
treatments for rare diseases, particularly already-approved or
late-stage products. With the $1.6 billion breakup fee it
received when AbbVie Inc. dropped a plan to buy the company late
last year, Shire’s financial leverage will be relatively low,
according to CRT Capital’s Timothy Chiang.
“Their balance sheet is still relatively clean,” Chiang
said in a phone interview from Stamford, Connecticut. “M&A
remains a recurring theme.”
Here are a handful of drug developers with products in the
later stages of the testing and approval process that are valued
at $100 million to $10 billion, according to data compiled by
Bloomberg:
PTC THERAPEUTICS INC. -- The $1.8 billion company applied last
month for U.S. Food and Drug Administration approval to market
its treatment Translarna for a rare genetic muscle disorder
called nonsense mutation Duchenne muscular dystrophy. It is
already approved in the European Union and has been granted
orphan-drug status in both regions, which extends its market
exclusivity. Revenue at South Plainfield, New Jersey-based PTC
is projected by analysts to surge to more than $500 million by
2018 before topping $1 billion beginning in 2020.
SYNAGEVA BIOPHARMA CORP. -- Shares of Lexington, Massachusetts-
based Synageva have surged 53 percent since early November, when
it reported positive phase 3 study data for its drug for
lysosomal acid lipase deficiency, which can cause cirrhosis of
the liver and accelerate atherosclerosis. The $4 billion company
requested a priority review from the FDA, which would shorten
the agency’s decision time to 8 months from about a year.
Analysts forecast more than $500 million in sales starting in
2019.
RETROPHIN INC. -- A smaller candidate at just $363 million,
Retrophin has an orphan-designated treatment undergoing a phase
2 trial for focal segmental glomerulosclerosis, which can cause
kidney failure. It also has approved drugs for gallstones and
hypertension. Shares of the New York-based drug developer have
risen 18 percent in the past year.
ULTRAGENYX PHARMACEUTICAL INC. -- This $1.7 billion
biotechnology company focused on rare diseases is projected to
generate more than $500 million of annual revenue beginning in
2022. A phase 3 study is under way for its therapy for a
metabolic disorder that affects most tissues and organs, and can
cause stillborn babies and infant deaths. The Novato,
California-based drug developer also received orphan status for
treating a syndrome that causes the brain to not function
properly because it doesn’t get enough glucose.
Bigger Ambitions -- Should Shire desire a larger target,
BioMarin Pharmaceutical Inc. and Vertex Pharmaceuticals Inc. are
options. San Rafael, California-based BioMarin, valued at about
$14 billion, touched a record $98.63 Monday and has a slate of
experimental treatments for rare diseases and cancer. Revenue
may climb above $1 billion next year and then top $2 billion in
2019. At $29 billion, Boston-based Vertex would be an even
larger merger partner. It’s already generated more than $1
billion of annual sales and the stock has risen 53 percent in
the past year.
A representative for BioMarin said the company doesn’t
comment on speculation. Representatives for PTC, Synageva,
Retrophin, Ultragenyx and Vertex didn’t immediately respond to
requests for comment.
For Related News and Information:
Shire May Extend Takeovers After Buying NPS for $5.2 Billion
Drug Buying Spree Still Bustling as Pfizer Leads Hunt: Real M&A
Shire Said to Consider Bid for NPS as It Revisits Takeovers
Real M&A columns: NI REALMNA <GO>
Top deal stories: DTOP <GO>
Merger Calculator: MRGC <GO>
M&A Data: MA <GO>
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman