TURNHOUT, Belgium—In an effort to boost its portfolio of gastrointestinal products and to drive its international growth, British drugmaker Shire PLC has announced plans to buy Belgium's Movetis NV for $559 million.
The public tender offer is expected to start upon approval by the Belgian supervisory authority of the bid prospectus.
"This transaction, when completed, will create significant shareholder value," says Staf Van Reet, chairman of Movetis' board of directors. "This offer is a further remarkable milestone in Movetis' brief and dynamic history."
The company was spun out of Johnson & Johnson several years ago and raised about $128 million in an initial public offering in late 2009 to provide funds to market Resolor and develop new drugs. J&J retains some marketing rights for Resolor outside Europe, and Movetis is due royalties on sales.
In October, Movetis gained the authorization to market Resolor in 30 European countries, followed by the commercial launch of Resolor in the first European markets in the first half of this year. Resolor is a selective, high-affinity 5-HT4 receptor agonist specifically developed to target impaired motility associated with chronic constipation, thereby restoring normal bowel movement. It was approved by the European Medicines Agency in October as a treatment for chronic constipation in women who don't get relief from laxatives.
"This rapid development has now led to receipt of an offer to join forces with Shire, one of the most valuable specialty pharmaceutical companies with a strong specialty presence in the U.S. and Europe," adds Van Reet.
Mike Cola, president of Shire's specialty pharmaceuticals business, adds that the acquisition of Movetis will "provide immediate revenue from a newly launched product that has strong patent protection, as well as a promising GI pipeline."
The Movetis pipeline may be a key attraction for Shire, which will pick up the company's gastrointestinal drugs that have yet to be approved by regulators, including two drugs in early clinical development and several drugs that have not yet entered clinical trials.
According to Chris Van Raemdonck, communications director at Movetis, the company's officials believe the offer is attractive because the offer price "represents a significant premium over the Movetis share price ever since its creation, compared to the IPO and until now."
"Resolor and the other compounds of the Movetis portfolio will be supported by a financially and commercially strong and rapidly growing organization that wants to strengthen its GI business for strategic reasons," he adds.
The Movetis team also could benefit, Van Raemdonck adds, because "it can continue its current job/task within a global and dynamic organization with the strategy to strengthen its GI business, especially in Europe, thus creating new opportunities."
It is anticipated that Movetis will play an important role in Shire's GI business. Movetis staff will play key roles in research and development in the GI field and in the European commercialization of Resolor and, over time, of Shire's Mezavant. Movetis' employees in Belgium, the United Kingdom and Germany will continue to support the Resolor launch and will over time become part of the Shire organization.
Current Movetis CEO Dirk Reyn will head these European efforts, which will be grouped in the existing legal entity based in Turnhout, Belgium. He will report into the Shire global GI business head.
"The management teams of Movetis and Shire believe that, together, we will be able to build on our know-how, our existing European teams and our infrastructure to become a partner of choice for European GI specialists and optimize the commercialization of Resolor alongside Mezavant in Europe," says Reyn. "Taking our other assets in development into account, we have one of the strongest global and European product portfolios in gastroenterology."
Analyst firm Lazard Capital Markets said in a research note that a high unmet medical need exists in the chronic constipation market.
"We believe that Shire's estimates are not unreasonable," the firm said. "The company gains access to an early- to mid-stage pipeline in one of a key and core therapeutic area."
In a release, Karl Bradshaw, an analyst with Morgan Stanley, said, "Movetis' lead compound Resolor is a strong fit with Shire's GI franchise and approval of the drug in 30 countries (across Europe) de-risks the acquisition."
Peter Welford, an analyst at Jefferies & Co., told Reuters the deal was positive, although he was less confident in Resolor's sales potential.
"We agree the acquisition should be earnings accretive after 2012, but are more cautious on Resolor's EU commercial potential, with a $300 million preliminary peak sales estimate versus Shire's more than $400 million peak," he says.
