View Full Version : Shire acquires Vyvanse (NRP104) producer

02-22-07, 11:06 PM
My summary: Shire (maker of Adderall) acquires New River, who owned the IP for Vyvanse (NRP104), for $2.6 billion. The two companies has agreed to co-promote the drug 2 years ago. Vyvanse has given its second approvable letter for ADHD in children, and would launch the drug for that purpose in 2Q 2007. In the same quarter it is planned a sNDA for adult use would be filed. Shire called Vyvanse their "new flagship product for ADHD," implying it would replace Adderall.

20 Feb 2007 - Basingstoke, UK and Philadelphia, PA, US – February 20, 2007- Shire plc (LSE: SHP.L; NASDAQ: SHPGY; TSX: SHQ) (“Shire” or the “Company”) announces today that it has agreed to acquire New River Pharmaceuticals Inc. (NASDAQ: NRPH) (“New River”) for $64 per New River share, or approximately $2.6 billion in total, in an all cash transaction unanimously recommended by the Boards of both companies.

In January 2005, Shire entered into a collaborative agreement with New River to develop and co-promote NRP104, now known as VYVANSE™ (lisdexamfetamine dimesylate) for Attention Deficit and Hyperactivity Disorder (“ADHD”), before Phase 2 data were available for the drug. In December 2006, New River received a second approvable letter for VYVANSE from the US Food and Drug Administration (“FDA”) and, as previously announced, Shire plans to launch VYVANSE for the pediatric indication and file a supplemental New Drug Application (“sNDA”) for the adult indication in the second quarter of 2007. Shire is confident that the final terms of the expected FDA approval will provide a strong and differentiated platform for the successful launch of VYVANSE.

The acquisition of New River will allow Shire to capture the full economic value of VYVANSE, and gain control of the future development and commercialization of this product. This is consistent with Shire’s already stated focus on the growing ADHD market and allows the Company to progress and benefit from its successful strategy of acquiring, developing and marketing specialty products. In addition, the acquisition will provide Shire with access to potentially attractive new specialty drug candidates and technology.

The acquisition is structured as a tender offer for all outstanding shares of New River followed by a merger. The acquisition is subject to the approval of Shire’s shareholders as well as the satisfaction of certain customary conditions, including the tender of a majority of the outstanding New River shares on a fully-diluted basis and the expiration or earlier termination of the Hart-Scott-Rodino waiting period. We expect the tender offer to be commenced by March 2, 2007 and to close early in April 2007, unless extended. The tender offer is not subject to a financing contingency. Mr R.J. Kirk, New River’s CEO, who beneficially owns 50.2% of the total outstanding shares of New River common stock (or 46% on a fully diluted basis) has agreed pursuant to a tender and support agreement with Shire that he will tender his shares in the tender offer.

Shire Chief Executive Officer, Matthew Emmens, said:
“This is an important and complementary acquisition that gives us full control of VYVANSE, a novel drug. We are confident and expect that the final labeling will provide patients and physicians with real benefits that differentiate this compound from other ADHD products. It will enable us to drive the launch and future development of VYVANSE and gain the full economic benefits of the drug. Based on VYVANSE’s expected profile, we believe it has the potential to be the next generation stimulant product to ADDERALL XR®. This acquisition continues our leadership position in the growing US ADHD market, improves our operating margins, significantly enhances our earnings growth from late 2009 and delivers on our overall global growth strategy. The combined debt and equity financing announced today enables us to both acquire New River and retain the financial flexibility to make further acquisitions that will continue to drive Shire’s growth.”

Acquisition Rationale:
VYVANSE represents the future flagship product for ADHD

Shire is confident in its ability to make VYVANSE the leading treatment in the ADHD market and, as Shire has demonstrated historically, to transition successfully the majority of patients from its current market leading product (ADDERALL XR) to the next generation prodrug ADHD product (VYVANSE)
VYVANSE, as a New Chemical Entity (NCE), represents an important innovation in ADHD treatment with a favorable therapeutic profile for pediatric ADHD patients
In clinical studies designed to measure duration of effect, VYVANSE provided significant efficacy compared to placebo for the full treatment day, up to, through and including 6:00 pm
In two clinical human drug abuse studies, VYVANSE produced subjective responses on a scale of “Drug Liking Effects” (DLE) that were significantly less than d-amphetamines in the case of oral administration and less in the case of intravenous administration at equivalent dosages. DLE is used in clinical abuse studies to measure relative preference among known substance abusers
VYVANSE has robust intellectual property with patent protection through to June 2023 in the US and through to June 2024 in Europe

Opportunity to fully control development and commercialization strategy for VYVANSE

Shire can leverage its ADHD expertise to maximize the value of VYVANSE’s development program, including pursuing further studies in ADHD and additional product indications
Establishes a single voice to the key opinion leaders for the product, based on Shire’s already strong ADHD position in the US. Consistent marketing program to be delivered through a single experienced sales organization
Enhances Shire’s existing excellent relationship with ADHD physicians and the patient community
Opportunity to maximize VYVANSE’s potential in North America and Europe

Attractive market opportunities

Current US ADHD market worth $3.3 billion with current estimated yearly market prescription volume growth at 4% which Shire expects to rise to 6% with the introduction of new products
Major opportunity in adult ADHD market

Currently makes up close to 40% of total prescriptions and adult prescription volume grew 9% over 2005
Market data estimates that 75% of adult ADHD patient population in the US remain undiagnosed, under-treated or untreated

Major opportunities for ADHD in growing European markets

Shire plans to file VYVANSE for European approvals for pediatric indication in 2009

Acquisition allows Shire to capture fully the future profits of VYVANSE. It is expected to enhance significantly Shire’s medium and long-term earnings per share (EPS) growth

Significantly enhances Shire’s operating margin through elimination of VYVANSE’s profit share and royalties
Expected to be cash EPS and US GAAP EPS neutral in 2009 and significantly earnings enhancing from late 2009
Effective use of Shire’s balance sheet and cash generation
Shire retains financial flexibility to make further acquisitions

Adds to Shire’s product pipeline and broadens technology platform

NRP290 (phase 2 for acute pain)
NRP409 (pre-clinical) for use in treatment of hypothyroidism
Ownership of patented CARRIERWAVE™ platform technology, with potential application in reduced drug abusability

A circular providing further details of the acquisition and convening an Extraordinary General Meeting of Shire shareholders will be posted to Shire shareholders in due course.

Shire also announces today its results for the twelve months to December 31, 2006, which demonstrate the continued strong growth of its ADHD portfolio. Please refer to the separate press release.