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Shire buys NPS Pharmaceuticals for $5.2 billion

Shire Plc has strengthened its position in the important growth area of biopharmaceuticals by acquiring its U.S. rival NPS Pharma.

Chief executive Flemming Ornskov described the move as “…a significant step in advancing Shire’s strategy to become a leading biotechnology company”.

On the rebound following its recent jilting by AbbVie, the deal is a sign of Shire’s intention to move on quickly and restore value to shareholders. The $5.2 billion purchase price will be offset by a $1.6 billion break-up fee received from its former suitor.

Shire’s new partner gives the U.K. company a route into the lucrative market for orphan drugs, treatments for rare diseases that attract government incentives including enhanced marketing rights and improved patent protections. 15 of last year’s 41 new drug approvals in the U.S. were for this kind of treatment.

NPS’ current top-selling medication, Gattex, is forecast to receive over $500 million in sales by 2019. Shire will also acquire Natpara, a treatment for hypoparathyroidism that is currently awaiting FDA approval.

While approval for the new drug is by no means guaranteed, NPS chief executive Francois Nader was upbeat about its prospects, adding that the acquisition “…would provide the joint company the opportunity to deploy the most resources in supporting the launch”. If approved, Natpara could bring in an additional half a billion in sales for the company.