In a bid to strengthen its rare disease portfolio, Shire ( SHPG ) entered into an agreement to acquire privately-held, biopharmaceutical company, Lumena Pharmaceuticals, Inc., for an upfront payment of $260 million in cash along with milestone payments.
This acquisition will add two candidates to Shire's pipeline: LUM001 and LUM002. Both these candidates are inhibitors of the apical sodium-dependent bile acid transporter (ASBT), which is primarily responsible for recycling bile acids from the intestine to the liver.
LUM001 is currently in a phase II study for four rare cholestatic liver disease indications (two pediatric and two adult) with a potential launch in 2016 upon approval.
LUM002 completed phase I studies in healthy volunteers and a phase Ib study in patients with metabolic disease. The company will begin with phase II trial in patients with non-alcoholic steatohepatitis (NASH) in the second half of 2014.
We note that this acquisition will not impact Shire's previously stated earnings guidance for 2014.
Shire currently carries a Zacks Rank #2 (Buy). The acquisition will further strengthen Shire's rare disease portfolio and complement its strong gastrointestinal presence.
Moreover, the acquisition is also expected to fit well with Shire's recent acquisition of Fibrotech. The acquisition of Fibrotech has added another candidate, FT011, to its pipeline, which is being developed for patients suffering from renal impairment.
Other stocks that currently look attractive include Allergan Inc. ( AGN ), Gilead Sciences Inc. ( GILD ) and Astellas Pharma ( ALPMY ). While Allergan and Astellas Pharma carry a Zacks Rank #2, Gilead Sciences carries a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportALLERGAN INC (AGN): Free Stock Analysis ReportASTELLAS PHARMA (ALPMY): Get Free ReportGILEAD SCIENCES (GILD): Free Stock Analysis ReportSHIRE PLC-ADR (SHPG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research