Shire to acquire NPS Pharma for $5.2 billion
Dublin, Ireland-based Shire and NPS Pharmaceuticals have entered into a merger agreement, under which Shire will acquire all outstanding shares of NPS Pharma for $46 per share in cash, for a total consideration of approximately $5.2 billion.
Shire will accelerate the growth of NPS Pharma’s portfolio through its market experience in gastrointestinal (GI) disorders, core capabilities in rare disease patient management and global footprint. The transaction has been approved unanimously by the boards of directors of both Shire and NPS Pharma.
The $46 per share price represents a 51% premium to NPS Pharma's unaffected share price of $30.47 on Dec. 16.
Flemming Ornskov, M.D., MPH, Shire’s CEO, said, “The acquisition of NPS Pharma is a significant step in advancing Shire’s strategy to become a leading biotechnology company. With our global strength and expertise in both rare diseases and GI, Shire is uniquely positioned to drive the continued success of Gattex/Revestive, and, if approved, commercialize NPS Pharma’s pipeline compound Natpara/Natpar.”
Francois Nader, M.D., president, CEO and director of NPS Pharma, said, “Shire shares NPS Pharma’s commitment to patients with rare diseases. We believe that joining our two companies will drive value for shareholders and ensure we continue to transform the lives of patients with short bowel syndrome, hypoparathyroidism and autosomal dominant hypocalcemia worldwide."
NPS Pharma is a commercial-stage rare disease-focused biopharmaceutical company based in Bedminster, N.J., whose first product, Gattex (teduglutide [rDNA origin]) for injection, has been launched in the U.S. to treat adults with short bowel syndrome (SBS). NPS Pharma is in the process of launching the product in Europe under the trade name Revestive.
NPS Pharma has an operational presence in the U.S., Canada, Europe, Latin America and Japan. The value of NPS Pharma’s gross assets were $282.2 million with net assets totaling $130.9 million as of Sept. 30, 2014. NPS Pharma’s losses before tax for the three-month and nine-month periods ending Sept. 30, 2014 were $1.9 million and $6.2 million, respectively.
NPS Pharma currently has several successful partnerships in place. Amgen markets cinacalcet HCl as Sensipar in the U.S. and as Mimpara in the E.U.; Janssen Pharmaceuticals markets tapentadol as Nucynta in the U.S.; and Kyowa Hakko Kirin markets cinacalcet HCI as Regpara in Japan, Hong Kong, Malaysia, Macau, Singapore and Taiwan. NPS Pharma earned royalty revenues of $123.8 million for 2013 and $89.5 million for the first nine months of 2014 ending Sept. 30.
NPS Pharma is developing teduglutide as a treatment for pediatric SBS. NPS Pharma currently is conducting a global study for teduglutide in pediatric patients with SBS who are dependent on parenteral support.
NPS Pharma has an ongoing phase IIa study evaluating its lead pipeline candidate NPSP795 for the treatment of adults with autosomal dominant hypocalcemia. NPSP795 is a small molecule antagonist of the calcium-sensing receptor, which is believed to play a role in the distribution of PTH -83 throughout the body by antagonizing calcium-sensing receptors on the parathyroid gland to trigger a release of the body's stores of PTH -83. NPSP795 is in development as a treatment for autosomal dominant hypocalcemia (ADH). There is no approved therapy for this ultra-rare, life-long genetic disorder that affects both adults and children.
NPS Pharma’s second product rhPTH -83 (Natpara in the U.S./Natpar in Europe) currently is under review in the U.S. and Europe for the treatment for hypoparathyroidism (HPT).
The acquisition of NPS Pharma is expected to enhance Shire’s revenue and earnings growth profile. Shire expects the transaction to be accretive to Non GAAP EPS from 2016 onward.
Shire anticipates it will realize operating synergies beginning in 2016 and growing substantially thereafter. It also expects the transaction will deliver ROIC in excess of its weighted average cost of capital.
The acquisition is structured as an all-cash tender offer for all of the outstanding shares of NPS Pharma at $46 per share, followed by a merger in which each remaining untendered share of NPS Pharma common stock would be converted into the same $46 cash per share consideration.
The closing of the transaction is subject to customary conditions, including the tender of a majority of the outstanding NPS Pharma shares and the receipt of Hart-Scott-Rodino clearance. It is anticipated to close in the first quarter of 2015.