Shire Plc’s acquisition of Lumena Pharmaceuticals Inc. is an ideal fit for its businesses in rare genetic disorders and gut disease, and can help sustain sales growth, said Chief Executive Officer Flemming Ornskov.
Shire yesterday said it agreed to pay $260 million plus milestone payments for closely held Lumena, a San Diego-based developer of experimental drugs for a set of diseases in which the formation or flow of bile is impeded, leading to liver damage, liver cancer or the need for a transplant. One such disorder, called primary sclerosing cholangitis, led to the death of British tennis player Elena Baltacha this month.
The deal is the sixth since Ornskov’s appointment was announced in October 2012, including the $4.2 billion acquisition of ViroPharma Inc. in November. Lumena’s drugs, if successful in clinical trials, will help sustain growth spurred by Lialda, a treatment for ulcerative colitis that was Shire’s third-biggest seller last year with revenue of $529 million and one of its fastest-growing products.
“It’s clear that to keep that momentum and that growth going we needed to have more products and we’ve been looking for some time,” Ornskov said in a telephone interview.
“I always felt the ideal combination would be if we could have our gastrointestinal focus aligned with our rare disease business,” he said. “The financials also made sense, but that was not primary.”
Shire’s share price has climbed 63 percent in the past 12 months, making it the second-best performer in the Bloomberg Europe Pharmaceutical Index.
Two of Ornskov’s first purchases as CEO were companies with experimental therapies for eye disease, Premacure AB and SARCode Biosciences Inc. When asked whether he was still interested in expanding in ophthalmology, Ornskov said the company has its “hands full” with those products, which keep the company “more than busy.”
“There’s enough work around those compounds that that’s the focus for our ophthalmology assets right now,” he said.
Ornskov declined to comment on whether the company had considered bidding for ThromboGenics NV, after Bloomberg News reported last month that Shire was among the potential bidders for the Belgian maker of the Jetrea eye drug.
He also declined to comment on whether Shire had been approached by Allergan Inc., after Reuters reported that the Botox maker was preparing a takeover offer to fight off a bid from Valeant Pharmaceuticals Inc.
“Shire looks at a lot of stuff, and we often get rumored in the context of things we are looking at,” he said.