Shire to acquire Advanced BioHealing for $750 million

Shire plc has announced that it has signed an agreement to acquire Advanced BioHealing, Inc., providing the global specialty biopharmaceutical company with a strong foothold in the regenerative medicine market.

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DUBLIN—Shire plc has announced that it has signed anagreement to acquire Advanced BioHealing, Inc., providing the global specialtybiopharmaceutical company with a strong foothold in the regenerative medicine market.Shire will acquire Advanced BioHealing for $750 million in cash, which will befinanced from the company's existing cash resources. The company reports thatthe acquisition is not expected to have an impact on its previously statedguidance for 2011.
"This acquisition is a strong and complementary strategicfit for Shire," says Mike Cola, President of Shire's Specialty Pharmaceuticalsbusiness. "We will invest in the strengths of Advanced BioHealing's specialistcommercial team, its manufacturing and its product development."
The acquisition will grant Shire global rights forDERMAGRAFT, and the company plans to continue to invest in developing newindications for the treatment, in addition to expand it to other countries.Advanced BioHealing's DERMAGRAFT product is one of the biggest aspects of theacquisition. DERMAGRAFT is a regeneratve bio-engineered skin substitute that isindicated for use in treating diabetic foot ulcers (DFUs). Through the product,Advanced BioHealing has achieved a 5 percent patient share of the potential $3billion that the slow-healing DFU market represents, and reported $146 millionin U.S. sales last year.
Nearly 538,000 people are affect by slow-healing DFUsannually in the U.S., and the condition represents a significant unmet need.The World Health Organization (WHO) estimates that the incidence of diabetescould increase 43 percent between 2007 and 2005, and since diabetic patientsface a 15 to 25 percent lifetime risk of developing a DFU, there is significantgrowth potential for DERMAGRAFT.
"The potential to build on the success of DERMAGRAFT isattractive," Cola notes. "It's already a leading product providing a solutionfor a common complication suffered by diabetics in the US that, if not treatedeffectively, can lead to lower limb amputation and high cost to patients andsociety."
DERMAGRAFT also has potential indication in the treatment ofvenous leg ulcers (VLU). Additionally, the companies hope to increase awarenessregarding DFUs and hopefully prompt earlier medical intervention. There areapproximately 65,000 non-traumatic lower limb amputations performed on peoplewith diabetes in the U.S. each year. A comprehensive program on foot-careeducation and preventive therapy could cut amputation rates by 45 to 85percent.
"We believe there's an opportunity to create more value fromDERMAGRAFT and Advanced BioHealing's proprietary technology and that withAdvanced BioHealing's team joining Shire, we can build Advanced BioHealing intoan exciting new business providing regenerative medicine for patients' unmetneeds," says Cola.
Kevin Rakin, Chief Executive Officer of Advanced BioHealing,will continue to lead the business within the Shire organization after theacquisition. Advanced BioHealing will become part of Shire's SpecialtyPharmaceutical business, and under Shire's ownership, will expand its existingmanufacturing capacity.
"This is a very exciting opportunity for all of us atAdvanced BioHealing to develop the business and deliver continued growth withina new environment that is highly complementary and will provide great leveragefor us," says Rakin of the acquisition. "We all look forward to being part ofShire."
The closing of the acquisition is subject to customaryconditions, including obtaining anti-trust clearances.

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