) recently announced its intention to acquire privately-held
biotech company, Lotus Tissue Repair, Inc.
Lotus Tissue Repair is developing a protein replacement
therapy for the treatment of dystrophic epidermolysis bullosa
Shire will pay an upfront fee for the acquisition along with
certain contingent payments based on the achievement of certain
safety and development milestones. Other financial details were
Shire's Human Genetic Therapies business will take over the
development of Lotus Tissue Repair's lead candidate, a
proprietary recombinant form of human collagen type VII (rC7), an
intravenous protein replacement therapy for the treatment of DEB.
We note that Shire already has an EB candidate, ABH001, in its
pipeline. ABH001 is being developed as a dermal substitute
therapy for the treatment of non-healing wounds in patients with
Concurrent with this acquisition, Shire also stated that it
expects to meet the general consensus earnings estimate of $6.69
- $6.70 in 2012 driven by a double digit growth in
The company's leading drug in the key attention deficit
hyperactivity disorder (ADHD) market, Vyvanse, represents
significant commercial potential. Vyvanse is being developed for
new indications such as major depressive disorder, binge eating,
and negative symptoms of schizophrenia, all being in phase III
Vyvanse and Intuniv both together account for 45% of the total
market growth in the US ADHD market. Vyvanse should gain approval
in Europe (under the trade name Elvanse) soon given the positive
outcome from the European Decentralised Procedure (DCP) in Dec
2012. According to the company, the European market is currently
worth $500 million.
However, Shire faces stiff competition from the likes of
Johnson & Johnson
) in the key ADHD market.
We currently have a Neutral recommendation on Shire which
carries a Zacks Rank #3 (Hold). Right now, pharma stock Novartis
(NVS) looks more attractive with a Zacks Rank #2 (Buy).
JOHNSON & JOHNS (JNJ): Free Stock Analysis
NOVARTIS AG-ADR (NVS): Free Stock Analysis
SHIRE PLC-ADR (SHPG): Free Stock Analysis
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