Shire on hunt for assets in stem cells, genetics
NEW YORK (Reuters) - British drugmaker Shire Plc (SHP.L) would like to acquire experimental products derived from stem cells, but the company's chief executive said it is hard to find assets that are likely to make money.
Speaking at the Reuters Health Summit on Wednesday, Angus Russell said the two areas of medicine that will be "transformational" are stem cells and genetics.
Both technologies hold the potential to help the body's cells and tissue regenerate and fight diseases ranging from diabetes to Alzheimer's.
"The science is there," said Russell, "the challenge is finding something you can turn into a business."
The company is nonetheless interested in acquisitions in the space, and is making a series of modest investments -- of between $3 million and $5 million -- in young companies that are engaged in gene manipulation and regenerative medicine.
"Somewhere in the future there may be an opportunity to buy into these genetic technologies," he said.
Russell has a rigorous and unsentimental approach to acquisitions and investment. No matter how attractive the science, he needs to be convinced, at an early stage, that an experimental product can generate a profit over the long term.
"We are only interested in looking at assets that are valuable to society and that payors will pay for," he said.
The company has revamped its internal processes to evaluate an experimental drug's chances of showing a benefit over existing products. In today's price-conscious healthcare environment, companies will increasingly have to show that their drugs are unique or superior to those on the market, he said.
"We find lots of things that have interesting science, but where I say 'I'm not sure you're going to be able to sell that in the current healthcare environment.'"
Few major drug or biotechnology companies are committing significant resources to stem cell research. One of the most active is biotechnology company Celgene Corp (CELG.O), whose chief executive, Robert Hugin, said on Tuesday that he expects the company to have an approved stem cell-derived product on the market within four years.
In the near term, Russell said the company is looking for ways to expand its current areas of interest. The company makes Adderall XR and Vyvanse for attention deficit hyperactivity disorder, and drugs to treat the rare genetic disorders Gaucher disease and Fabry disease.
The company is looking for assets that require minimal infrastructure to sell and market. It is actively looking at three or four areas, though the assets are fairly small. In addition, Russell said the company will increasingly collaborate on technologies that can serve as a platform for developing multiple drugs.
As a model, Russell pointed to the company's agreement last year with Acceleron Pharma to develop new drugs that modulate the growth of cells and tissues, including muscle, bone, fat and red blood cells. The collaboration will initially investigate a treatment for patients with Duchenne Muscular Dystrophy, a fatal muscle disease.
When it comes to gene manipulation, he said, "we're beyond the stage of if, but when."
"The ability to regulate genes is there," he said. "The challenge is how effectively we can do that."
(Reporting by Toni Clarke, editing by Matthew Lewis)
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