Shire plc
(
SHPGY
) and
Sangamo BioSciences, Inc.
(
SGMO
) recently entered into a collaboration and license agreement for
the development of products for hemophilia and other monogenic
diseases. These products will be developed using Sangamo's zinc
finger DNA-binding protein ("ZFP") technology.
Terms of the Deal
Shire will make an upfront payment of $13 million to Sangamo.
Sangamo will also be eligible to receive milestone payments of up
to $213.5 million based on the achievement of research, regulatory,
development and commercial targets. Shire will pay Sangamo tiered
double-digit royalties on product sales.
As per the agreement, Shire will get exclusive global rights to
ZFP therapeutics designed to target 4 genes for investigating
curative therapies for hemophilia A and B. Shire also gets the
right to designate 3 additional gene targets.
While Sangamo will undertake all responsibilities till the
submission of an Investigational New Drug ("IND") application or
European Clinical Trial Application ("CTA"), Shire will reimburse
Sangamo's program-related costs (both external and internal).
This deal is in line with the company's strategy of pursuing
bolt-on acquisitions and alliances to expand its pipeline. In
January, the company acquired the US rights of Resolor from Janssen
Pharmaceutica N.V., a
Johnson & Johnson
(
JNJ
) company.
Shire is facing generic threats for several of its key marketed
products. The company is already facing generic competition for
Adderall XR, one of its top revenue-generating products.
Teva Pharmaceutical Industries, Ltd.
(
TEVA
) and
Impax Laboratories, Inc.
(
IPXL
) had launched generic versions of Adderall XR in April 2009 and
October 2009, respectively.
Vyvanse, currently the top revenue grosser at Shire, is also
facing patent challenges. Six companies, including Sandoz, Inc.,
Amneal Pharmaceuticals LLC,
Watson Laboratories
(
WPI
), Roxane Laboratories, Inc.,
Mylan Pharmaceuticals, Inc.
(
MYL
) and Actavis Elizabeth LLC and Actavis Inc. (both together) have
filed ANDAs for their generic versions of Vyvanse. Shire has filed
patent infringement lawsuits against all these companies.
Shire is currently fighting patent infringement lawsuits for
several of its other products as well including Intuniv, Fosrenol
and Lialda.
Our Recommendation
We currently have a Neutral recommendation on Shire. The stock
carries a Zacks #3 Rank (hold rating) in the short run.
Shire's recent collaborations and acquisitions (including
Movetis and Advanced BioHealing Inc.) have added immense potential
to its pipeline. With several of its products already facing or
likely to face generic competition, the company's pipeline needs to
deliver.
IMPAX LABORATRS (
IPXL
): Free Stock Analysis Report
MYLAN INC (
MYL
): Free Stock Analysis Report
SANGAMO BIOSCI (
SGMO
): Free Stock Analysis Report
SHIRE PLC-ADR (SHPGY): Free Stock Analysis
Report
WATSON PHARMA (WPI): Free Stock Analysis Report
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