Shire to acquire German pharma Jerini AG

Chris Anderson
BASINGSTOKE, U.K.—With a cash burn rate threatening to eat up its remaining available cash, but also holding a European approval for its hereditary angioedema (HAE) drug Firazyr, German pharma company Jerini AG announced on July 3 it will sell the company to global specialist pharmaceutical concern Shire for E6.25 per share. The all-cash transaction values Jerini at E328 million or roughly $509 million, and represents a 71 percent premium of the prior day's per share price.

While some may consider that a steep premium, Shire CEO Angus Russell says Jerini shares have undergone significant pressure in recent months due to recognition that as a biotech company, Jerini's cash burn rate was such that it would need to either turn to the markets for additional capital or consummate an acquisition deal. Further, the stock was also punished earlier in the year when it received a non-approvable letter for Firazyr from the U.S. Food and Drug Administration (FDA).

Despite the rebuff from the FDA, Firazyr has gained European Medicine Agency (EMA) approval. Additionally, Firazyr has been granted orphan drug status by both the EMA and the FDA.

As an acquisition target, Jerini appears to be a well-fitted shoe for Shire. Russell notes the company looks for a number of different characteristics for either acquisition or licensing deals: drugs with strong competitive position aimed at the specialist physician market that treatment symptomatic disorders; a concentration on low-risk projects with relatively fast paths to market; companies with small sales forces; and products that have peak annual sales of $300 million to $500 million.

"The acquisition of Jerini AG … absolutely ticks every one of the boxes on this set of strategic objectives," says Russell.

Yet in order for the Firazyr to reach its global market potential, Shire is hanging its hat on its confidence that it will eventually gain FDA approval to market the drug in the United States.

According to the company, it anticipates annual sales of the drug to be in the $350 million to $400 million range, but roughly two-thirds of that total is expected to come from the U.S., says Sylvie Gregoire, president of Shire HGT which will manage the sales and approval process.

Gregoire points to the data from two Phase III studies from the European approval process as proof that the drug is both effective and safe.
"There has to be a way to find a path forward for finding a solution with the FDA to provide sufficient data or sufficient evidence or analyses to allow the products at some point to be registered in the U.S.," she says.

In all, HAE has been diagnosed in roughly 10,000 people in the United States and Europe with and estimated 2,000 additional cases in the rest of the world. This number could be much larger as the hereditary disease is often hard to diagnose or is not diagnosed, so shire anticipates there will be more cases identified as the physicians get more information about the disease.

The company anticipates providing additional information to the FDA to determine the next steps it needs to take for ultimately gaining approval in the United States. Meanwhile, Shire anticipates first sales of the drug in Europe by the end of the year.

The companies expect the sale to be completed in September.

 

Chris Anderson

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