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Shire in $2 billion takeover talks with Cubist?

World News | May 25, 2011


Kevin Grogan

Shire in $2 billion takeover talks with Cubist?

As analysts applaud the firm's proposed takeover of Advanced BioHealing, announced last week, Shire is now rumoured to be interested in making a bid for the USA's Cubist Pharmaceuticals.

The Telegraph reports that Shire allegedly approached Cubist a month ago and offered $44.50 per share, around $2 billion. The newspaper claims that the companies have been in talks ever since, claiming that Morgan Stanley, one of Shire's corporate brokers, is said to be advising Cubist on offers.

Shire is the latest firm to be mentioned as a potential buyer for Cubist, which is best-known for its novel injectable antibiotic Cubicin (daptomycin), approved for the treatment of complicated skin infections and bacteremia caused by MRSA. Other rumours suggest AstraZeneca, which is a licensing partner for Cubicin, Teva or Johnson & Johnson may be interested.

Advanced BioHealing deal 'transformational'

Meantime, analysts at Matrix Group have issued a research note saying that the £750 million acquisition of Advanced BioHealing is "highly transformational, opening up a completely new market in the field of regenerative medicine, where there is limited competition and, to date, very few product approvals".

They believe the deal "is a turning point for Shire, in our view, akin to the inflection point we saw when it purchased Transkaryotic Therapies in 2005 for $1.6 billion". The analysts add that while Shire enters a new $3 billion diabetic foot-ulcer market, "more importantly, the acquisition brings with it manufacturing and development expertise in the cell-therapy space, giving Shire scope to grow a completely new business segment in one of the most exciting new areas of medicine".

Unconcerned about Vyvanse copy

Matrix also claimed that Novartis' recent filing of a copycat version of Shire's attention-deficit hyperactivity disorder drug Vyvanse in the USA "is a non-event, especially given the patent protection of the single amphetamine salt as a pro-drug and the fact that Shire has a serial history of successfully managing generic threats to its ADHD franchise".

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