March 12 (Bloomberg) -- Shire Plc, a maker of drugs for rare genetic diseases, bought Sweden’s Premacure AB to gain an experimental treatment against a blindness-causing disorder in babies born prematurely.
Shire will pay an upfront fee for the closely held company, which is based in Uppsala, and further payments if the drug meets certain development targets, the Dublin-based company said in a statement today, without disclosing amounts. The initial payment is probably less than $30 million, said Savvas Neophytou, an analyst at Panmure Gordon & Co.
The acquisition gives Shire a protein-replacement therapy called insulin-like growth factor 1, or IGF-1, against retinopathy of prematurity, one of the most common causes of vision loss in childhood. The deal is Shire’s second this year, and fits with a strategy of building its rare disease business, analysts including Mark Clark at Deutsche Bank AG said.
Incoming Shire Chief Executive Officer Flemming Ornskov was a “fan of eye products” while at Bayer AG and the acquisition is “an interesting first deal following his arrival,” said Navid Malik, an analyst at Cenkos Securities Plc.
Shire rose 1 percent to 2,057 pence as of 3:31 p.m. in London, giving the company a market value of 11.5 billion pounds ($17 billion).
Shire is buying Premacure from a group of about 140 private investors, Jan Borg, Premacure’s chief executive officer, said in a telephone interview today while on vacation sailing in the British Virgin Islands. Borg is among the owners, he said.
Premacure has been testing its drug, which it’s developing under the brand name Premiplex, in the second of three stages of clinical trials usually needed for regulatory approval in the U.S.
Shire will continue the trial and is evaluating the timeline, Jessica Cotrone, a spokeswoman, said in an e-mail. The company declined to say when it expects the drug to reach the market.
The study, which started in 2010, is designed to test the product in 80 infants, and is scheduled to be completed by December, according to information on the U.S. National Institutes of Health’s clinicaltrials.gov website. An earlier study found the drug increased levels of IGF-1 and was safe in preterm infants.
Retinopathy of prematurity affects as many as 16,000 preterm infants in the U.S. each year, requires medical treatment in as many as 1,500 cases, and causes blindness among as many as 600 babies, Shire said.
Babies born prematurely can lack IGF-1 and the ability of fully-grown fetuses to produce it themselves. Premiplex is designed to replace the protein and prevent vision loss.
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