Shire splashes out AbbVie cash with $5.2bn acquisition of NPS Pharma

Michael Bow
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The pharma industry was rife with M&A activity last year – yet some megadeals, such as Shire’s and AbbVie’s, fell through in the end
UK drugmaker Shire bounced back from its botched takeover by pharma giant AbbVie last night to seal a $5.2bn acquisition of US firm NPS Pharma – using its multi-billion dollar breakup fee from AbbVie to help fund the spending spree.

Shire has agreed to buy the US listed biotech firm for $46 a share – a 51 per cent premium to the price before talks emerged – three months after AbbVie left Shire reeling by walking away from a $54bn takeover.

The Basingstoke-based firm received a hefty $1.64bn breakup fee from AbbVie over the debacle, which will be fed back into the NPS acquisition, a spokeswoman confirmed.

A further $2.1bn will come from a five year revolving credit facility and $850m from short term bank debt.

Shire chief executive Flemming Ornskov said the takeover would help it “expand leadership in rare diseases”. “We look forward to integrating this portfolio. We believe the two companies have highly complementary business models,” he added.

NPS, led by boss Francois Nader, makes drugs for rare life-threatening diseases and has two blockbuster drugs. Gattex is used to treat people with short bowel syndrome, and Natpara treats hypoparathyroidism, a hormone disorder.

Ornskov last night knocked back scepticism over the timing of the deal, given Natpara is yet to receive full US regulatory approval for the drug. A decision which is due from the Food and Drug Administration on 24 January.

“We are very confident in this situation – in order for us to get this over the finishing line that’s the risk we have to take,” he said.

The deal comes as pharma chiefs gather in San Francisco today for the start of the annual JP Morgan Healthcare Conference, the industry’s set piece event.

Bankers from Citigroup and Lazard advised Shire while NPS used a team from Goldman Sachs and Leerink Partners.

NPS Pharma’s shares closed at $41.91 on Friday – making Shire’s $46 offer a 10 per cent premium. Shire closed at 4,741p.

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