* Upfront $160 mln plus milestones for drug progress
* U.S. buy follows recent acquisition of Premacure
* Deals give Shire basis for new ophthalmology business
By Ben Hirschler and Paul Sandle
LONDON, March 25 Shire is to buy
privately owned U.S. biotech firm SARcode Bioscience, paying
$160 million upfront to win rights to a new drug in late-stage
development for dry eye diseases.
The move is Shire's second acquisition this month of a small
company in the ophthalmology space - a hot area for
pharmaceutical research - following the purchase of Sweden's
Premacure two weeks ago.
Britain's third biggest drugmaker has a long history of
snapping up smaller biotech companies to build its speciality
drugs business and its new CEO said the latest deals showed that
the strategy was set to continue.
Flemming Ornskov will take over from Angus Russell as chief
executive on April 30.
Ornskov said ophthalmology was an area he knew well from his
previous roles at Bausch and Lomb, Novartis, where he
licensed eye drug Lucentis, and Bayer, where the
ophthalmic unit reported to him.
He said Shire could do further deals in ophthalmology, both
in back-of-the-eye and front-of-the-eye diseases.
"With us having now made two acquisitions, I think we are
sending a strong signal both to the external world and to the
internal world that we certainly will be looking at further
opportunities in ophthalmology, if it is in areas of
ophthalmology that we perceive to have high growth
opportunities, significant unmet need and where innovation is
the key driver for differentiation," he said.
Shire said on Monday it aimed to launch SARcode's new eye
drug Lifitegrast in the United States as early as 2016, if Phase
III clinical studies pan out as hoped. It is also evaluating
regulatory filing strategies in other markets.
In addition to the upfront payment of $160 million,
shareholders in California-based SARcode will be eligible for
additional undisclosed payments upon achievement of certain drug
development and commercial milestones.
With the global ophthalmic pharmaceutical market valued at
approximately $13 billion in 2012 and growing by 4.5 percent a
year, Shire said the therapeutic area was a good fit within its
portfolio of speciality medicines.
Because buying SARcode will add a new Phase III programme,
the drugmaker said it was conducting a prioritisation review of
its portfolio to accommodate this new expenditure in 2013.
"I don't anticipate that this will increase our overall R&D
expenditure this year, but I think we will have to make some
re-prioritisations," Ornskov said.
He said the two deals in ophthalmology demonstrated that he
would not change Shire's acquisition strategy.
"I want to continue to send the signal to any company,
particularly smaller companies, that if you are in speciality
medicine, if you have a lot of innovation and if you are in an
area of interest to Shire, you should look at Shire as a
potential future partner," he said.
Barclays acted as financial advisor to Shire, while J.P.
Morgan advised SARcode.