Shire Terminates Milestone Payments to Former Lumena Shareholders After Liver Drug Fails

October 23, 2015
By Alex Keown, BioSpace.com Breaking News Staff

DUBLIN – Shire Pharmaceuticals, is terminating all “future contingent” milestone payments with the former shareholders of Lumena as the company contemplates the future of a once-promising liver drug acquired in a merger that later failed in mid-stage trials, Shire announced today.

In its third-quarter earnings report, which was released earlier today, Shire said it is analyzing the results of Phase II trials for the experimental SHP625 in Primary Biliary Cirrhosis, Progressive Familial Intrahepatic Cholestasis and Alagille Syndrome. Shire said it is also closely looking at the results of a Phase Ib multiple dose study in SHP626 for the treatment of nonalcoholic steatohepatitis. Shire said it is looking to determine if there is a path forward for these two programs acquired after Shire purchased San Diego-based Lumena in 2014. Shire said it reached a deal with Lumena’s shareholders in September to terminate the $260 million buyout package for Lumena investors for a $90 million payoff.

At the time Shire acquired Lumena, Reuters reported Lumena CEO Mike Grey, meanwhile, said that Shire would help his company take its two liver drugs through the final stages of development and into the market. The drugs were expected to hit peak sales of $2 billion. Shire’s acquisition of Lumena was a chance to strengthen its focus on rare diseases and provide a growth path for Shire’s gastrointestinal business, which generated revenues of over $800 million in 2013, the year prior to the deal.

In April, Shire announced SHP625, formerly called LUM001, failed to meet primary and secondary endpoints in the study of 20 pediatric patients with Alagille syndrome. At the time, Philip Vickers, head of research and development for Shire, said the company remained committed to the “ongoing studies of SHP625 in ALGS and other indications.”

SHP625 is designed to block bile acid reabsorption in the terminal ileum and increases fecal bile acid excretion, thereby reducing recirculation of bile acids to the liver. The experimental drug is being studied in several rare cholestatic liver diseases for both pediatric and adult populations. Preclinical models demonstrate that SHP625 is a potent, selective minimally absorbed inhibitor of the apical sodium-dependent bile acid transporter.

Shire is coming off another disappointment after the U.S. Food and Drug Administration (FDA) rejected Shire PLC’s new drug application for the dry eye treatment lifitegrast without additional clinical studies. Last week the regulatory agency issued a “complete response letter,” a notice the FDA sends to companies to inform them the marketing application for the drug will not be approved in its current form. The FDA’s additional requirement came after the company completed a Phase III study of lifitegrast, dubbed OPUS-3, which is expected to be the basis of Shire's response to the FDA’s letter. Results are not expected to be available until November, but in a statement, the company said if the data is positive, it will include it as parts of its resubmission to the FDA in the first quarter of 2016.

Although the company took a hit from the FDA’s rejection, Shire has pledged to continue to pursue its $30 billion bid for Baxalta , Bloomberg reported. In July, Shire offered to acquire Baxalta in an all-cash transaction of about $45.23 per Baxalta share, a total of about $31 billion. Baxalta is a new company, having spun off from Baxter International on July 1, 2015. Chief Executive Officer Flemming Ornskov said the company was committed to the deal because it is an attractive opportunity. But, he said it was going to take some time, Bloomberg said.

Although Shire’s has taken a hit since an Aug. 3 high of $268.08, the stock was up this afternoon, trading at $213.38 per share.