Shire agrees acquisition of Dyax Corp for up to 6.5bn dollars

Shire has agreed the $5.9bn acquisition of Dyax Corporation, a US-based biotech with a rare-diseases pipeline offering strong growth potential, and said it remains interested in pursuing evasive rival Baxalta.

Still smarting from its rebuffed $31bn summer bid to acquire Baxalta, the Dublin-headquartered drug group said it will acquire Dyax for $37.30 in cash per Dyax share, for an up-front $5.9bn that could rise to $6.5bn upon the regulatory approval of its most advanced treatment for HAE, DX-2930.

The DX-2930 antibody is on the verge of Phase III trials and, Shire said, has the potential to achieve annual worldwide sales of up to $2bn with exclusivity beyond 2030.

HAE, a debilitating and sometimes life-threatening rare genetic disease, is one of the therapeutic areas on which Shire is already focused, through its Firazyr and Cinryze drugs.

“This highly complementary transaction aligns with and accelerates our strategy to build a global leading biotechnology company focused on rare diseases and specialty condition," said Shire chief executive Flemming Ornskov.

"It adds to our portfolio of best-in-class therapies addressing unmet needs in our core therapeutic areas, expanding and extending our leadership position in HAE."

As well as its lead product, Dyax will bring further early-stage antibody pipeline programs for the treatment of autoimmune diseases, diabetic macular edema and thrombosis; together with a well-established proprietary phage display antibody generation technology; and provide partnering revenue from its licensing and funded research portfolio.

Shire, which recently reiterated its full-year earnings guidance after reporting third-quarter results that showed a 21% fall in profits on a 3.7% increase in revenue, said the acquisition would bring the potential for "substantial value creation" for shareholders, with significant earnings accretion expected assuming FDA approval and anticipated launch of DX-2930 in 2018.

Ornskov added: “I am also confident that our M&A expertise and the ongoing strength of our business will enable rapid and effective integration following the closing, as demonstrated by the success of our NPS and ViroPharma acquisitions.

"Even with this transaction, we will continue to have the financial firepower to pursue other value-added strategic acquisitions, including Baxalta.”

The deal was one of many that Shire has undertaken in recent years and some analysts were confident this trend would continue.

Atif Latif, director of trading at Guardian Stockbrokers, saw value in the Dyax deal, given the potential synergies.

"We see the rational for the tie up and SHP to work in collaboration for Dyax R&D to fit well with SHP ability to greater develop this space and pipeline," he said. "With this in mind there should be plenty shareholder value to be extracted from this with expectations that they will start Phase III this year with the potential to become a strong revenue generator."