The market is overlooking the benefits of Shire Pharmaceutical’s $1.6 billion dollar, all-cash acquisition of Transkaryotic Therapies [[22/04/05d]], according to research from brokerage firm Merrill Lynch. The purchase - which brings with it two approved products, the Fabry disease therapy Replagel (agalsidase alfa) and the anti-anaemia treatment, Dynepo (epoietin delta) – is expected to close mid-year, but has not been particularly well received, and Shire’s share price dropped around 10% on the US stock market Nasdaq following the news.

While there are a number of risks to the deal – potentially the forthcoming Phase III data on I2S in Hunter syndrome and the entry of Dynepo (epoietin delta) into a highly competitive anti-anaemia marketplace – Merrill Lynch believes the deal will prove earnings neutral by 2007 and accretive from 2008. Thus, while it advises caution, the brokerage house notes that the purchase will provide Shire with some niche products “with long exclusivity and rapid earnings accretion from 2008 onwards.”