Shire has agreed to buy NPS Pharmaceuticals 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 brisk 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's chief executive Flemming Ornskov told Reuters he would keep looking for more deals to grow the company into a biotech powerhouse.
Shire will pay $46 per NPS share, representing a premium of nearly 10% to NPS' Friday closing price, the two companies said today.
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 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 about 25-35% 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 US Food and Drug Administration.
Consensus analyst forecasts for the two NPS medicines point to annual sales of $509m and $534m respectively by 2019, according to Thomson Reuters, although Ornskov believes they may bring in more.
"Both of them have significant sales potential and some have mentioned the word 'blockbuster'," he said. The term blockbuster applies to a drug with sales of $1 billion or more.
