Global specialty biopharmaceutical company Shire has agreed to acquire SARcode Bioscience, a Brisbane, Calif.-based privately held biopharmaceutical company. The acquisition continues to build Shire's presence in the ophthalmology therapeutic category and brings a new phase III compound—Lifitegrast—currently under development for the signs and symptoms of dry eye disease, into Shire's portfolio.

Shire will make an upfront payment of $160 million and SARcode shareholders will be eligible to receive additional undisclosed payments upon achievement of certain clinical, regulatory, and/or commercial milestones. The transaction is expected to close in the second quarter, subject to regulatory approval in the U.S., and other customary closing conditions.

"The acquisition of SARcode is a demonstration of Shire's focus on continuing to build our research and development pipeline with innovative, well-differentiated assets that address significant unmet patient need," said Flemming Ornskov, M.D., CEO designate, Shire. "This acquisition and our recent acquisition of Premacure have the potential to provide the basis for an attractive ophthalmology business for our company, given the significant growth opportunities in this therapeutic area as well as Shire's proven expertise in specialist markets."

Shire is currently conducting a prioritization review of its portfolio to accommodate this new expenditure in 2013. Shire anticipates launching Lifitegrast in the U.S. as early as 2016 pending a positive outcome of the phase III clinical development program and regulatory approvals. Shire is acquiring the global rights to Lifitegrast and will evaluate an appropriate regulatory filing strategy for markets outside of the U.S.

Barclays acted as financial advisor to Shire and Davis Polk acted as legal counsel to Shire. J.P. Morgan Securities acted as financial advisor to SARCode and Wilson Sonsini Goodrich & Roasati acted as legal counsel to Sarcode.