) announced that it has entered into a definitive agreement with
Organogenesis Inc. to sell Dermagraft.
Shire acquired Dermagraft through the acquisition of Advanced
BioHealing in 2011 thereby creating a separate business unit,
We note that Dermagraft is approved for the treatment of
diabetic foot ulcers in the U.S. and Canada.
Shire had undertaken restructuring of the sales and marketing
organization of Dermagraft and the implementation of a new
commercial model. However, Dermagraft no longer fits into the
revised business structure of Shire and hence the company decided
to divest it.
As per the agreement, Shire will receive no upfront payment
from Organogenesis. However, Shire is entitled to receive up to
$300 million cash in milestone payments assuming Organogenesis
meets certain annual net sales targets through 2018.
We remind investors that Shire has merged its three autonomous
divisions into one with an aim to reduce overlapping. Shire has
decided to pursue development programs with a focus on rare
diseases only. Hence, it discontinued all other development
programs. We believe Shire's efforts to build a leaner
organization with better focus on rare diseases should lead to
In a bid to strengthen its portfolio of rare disease drugs,
Shire announced that it will acquire
) for approximately $50 per share or $4.2 billion in Nov
Shire remains confident that if the potential acquisition goes
through, it will augment both its top and bottom line.
ViroPharma's lead drug Cinryze is approved in the U.S. for
routine prophylaxis against angioedema attacks in adolescent and
adults with hereditary angioedema (HAE). Cinryze complements
Shire's Firazyr, which is indicated for the on-demand treatment
of acute HAE attacks.
Shire carries a Zacks Rank #3 (Hold). Investors may consider
Questcor Pharmaceuticals Inc.
), which carry a Zacks Rank #2 (Buy).
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