Shire May Spend AbbVie Breakup Fee On NPS Pharmaceuticals, Inc.; NPS Surges On Rumor

Shire May Spend AbbVie Breakup Fee On NPS Pharmaceuticals, Inc.; NPS Surges On Rumor
December 18, 2014
By Mark Terry, Breaking News Staff

Rumors that Irish pharmaceutical company Shire Plc may acquire Bedminster, N.J.-based NPS Pharmaceuticals, Inc. caused NPS stock to jump 18.5 percent to open at $36.34 in morning trading in New York. Representatives for both companies have not commented.

Sources indicate that the offer may depend on approval of NPS’s thyroid drug Natpara by the U.S. Food and Drug Administration. That decision is expected to be made on Jan. 24, 2015.

Analysts believe Shire has been on the market ever since its bid for Chicago-based AbbVie died on the vine after changes in the U.S. tax code.

In July the two companies announced a merger agreement. But in September, after U.S. Treasury Secretary Jacob Lew laid out new rules to discourage domestic companies from moving their headquarters, the deal fell apart. However, Shire gained a $1.64 billion break-up fee from AbbVie and according to sources recently arranged a $2.1 billion loan facility.

Shire’s focus is in areas of neuroscience, rare diseases, GI and internal medicine. They are best known for ADHD medications and ulcerative colitis therapeutics. Its pipeline of experimental drugs is expected to generate $3 billion in additional revenue by 2020.

NPS markets Gattex (teduglutide) for treatment of Short Bowel Syndrome (SBS), called Revestive in Europe. The drug is expected to bring in $300 million in sales in 2016.

Although Shire has not commented, sources at Citi suspect Shire could offer up to $5 billion for NPS. They also speculate Shire may be gearing up for other acquisitions as well.

In October 2014, NPS announced the FDA had extended the company’s Prescription Drug User Free Act (PDUFA) action for its Natpara Biologics License Application (BLA) until Jan. 24, 2015. The compound is a bioengineered replacement therapy for the endogenous parathyroid hormone (PTH), aimed at treating a rare endocrine disorder called hypoparathyroidism. The disease affects about 50,000 people in the U.S.

“We continue to work closely with the FDA to finalize the review of our BLA for Natpara and appreciate the effective collaboration with the agency to date,” said Francois Nader, president and chief executive officer of NPS in a statement. “We continue to advance our commercial readiness activities and are planning for the launch of Natpara in the second quarter of 2015.”

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