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Mar 25, 2013

Shire Buys SARcode Bioscience for $160M+

  • Shire said today it will acquire drug developer SARcode Bioscience, in a $160 million-plus deal that expands the biotech giant’s presence in ophthalmology therapeutics—in part by bringing to its R&D portfolio a Phase III compound, Lifitegrast for dry eye disease.

    Shire will pay SARcode Bioscience $160 million up-front, plus additional payments to be received by SARcode shareholders tied to achieving undisclosed clinical, regulatory, and/or commercial milestones. The deal is expected to close in the second quarter, subject to U.S. regulatory approval and other customary closing conditions.

    Shire said it is now conducting a prioritization review of its portfolio to accommodate the additional expense of developing Lifitegrast. The small-molecule integrin antagonist is believed to work by reducing inflammation through binding inhibition of two proteins associated with lymphocyte function—associated antigen 1 (LFA-1) and intercellular adhesion molecule-1 (ICAM-1), which in turn influence T-cell activation and cytokine release.

    The interaction between the two proteins plays a key role in the chronic inflammation associated with dry eye, a major contributing factor to which is inflammation caused by T-cell infiltration, proliferation, and inflammatory cytokine production that can lead to ocular surface damage and reduction in tear film quality.

    Some 25 million people are affected by dry eye disease in the U.S. alone. “This number is expected to grow substantially in the next decade due to an aging population,” Shire said in a statement.

    Administered via a preservative-free topical eye solution, Lifitegrast is the subject of three clinical trials. The OPUS-1 trial, concluded last year, met its co-primary endpoint of reducing signs of dry eye—but not the other co-primary endpoint of reducing symptoms. Still, OPUS-1 led to what Shire called a positive meeting with FDA, and continuation of the Phase III clinical program.

    Two additional Phase III studies are in progress and ongoing: OPUS-2, a safety and efficacy study of both signs and symptoms of dry eye disease; and SONATA, a randomized, placebo-controlled safety study.

    Shire said it anticipates launching Lifitegrast in the U.S. as early as 2016 pending a positive outcome of the Phase III clinical development program and regulatory approvals. Shire, which is acquiring global rights to Lifitegrast, “will evaluate an appropriate regulatory filing strategy for markets outside of the United States.”

    The SARcode Bioscience deal is Shire’s second acquisition in the past month. On March 12, Shire expanded its therapeutic offerings into neonatology by saying it would buy Swedish-owned Premacure, the developer of a protein replacement therapy now in Phase II development for prevention of retinopathy of prematurity (ROP), for an undisclosed price.

    “This acquisition and our recent acquisition of Premacure have the potential to provide the basis for an attractive ophthalmology business for our company, given the significant growth opportunities in this therapeutic area as well as Shire’s proven expertise in specialist markets,” Shire’s CEO Designate Flemming Ornskov, M.D., said in the statement.

    Shire can leverage Dr. Ornskov’s expertise in ophthalmology from previous positions at Bausch & Lomb (global president, pharmaceuticals, and over-the-counter drugs) and Novartis (headed Global Ophthalmic Franchises among other roles)—and stay consistent with its focus on specialty markets—as it looks to capitalize on the field’s promise for future growth, Robert Stanislaro, senior director with FTI Consulting, said this morning in a letter to investors.

    Stanislaro cited the potential for future investment and development opportunities from new technologies and treatments, as well as a projected at 4.5% CAGR between 2011 and 2016, with significant unmet patient need and several attractive market segments that include dry eye as well as surgical, front-of-the-eye conditions, retina, and glaucoma.

    "This acquisition is a demonstration of Shire’s focus on building its research and development pipeline with new, well-differentiated assets to help drive the continued growth of the company," Stanislaro wrote.


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