Shire of the UK could be a fantastic buying opportunity for a mid- or large-cap pharmaceutical company that wants to bolster its pipeline, according to analyst Navid Malik of Collins Stewart, who believes AstraZeneca could be a good prospect.
In a research note, Malik notes that the drugmaker has shored up its attention deficit hyperactivity disorder (ADHD) franchise in recent months, by cutting a deal with Barr Laboratories to keep a generic of its flagship Adderall XR (mixed amphetamine salts) off the market and licensing a new ADHD product, NRP104, from New River Pharmaceuticals.
But added to this has been Shire’s franchise-building in the area of biologicals, spearheaded by its $1.6 billion acquisition of Transkaryotic Therapies last year, which has added to the raft of new products it has slated for launch in the next couple of years.
AstraZeneca is on the acquisition trail, having already bought Cambridge Antibody Technology for $1.3 billion this year, in order to boost its pipeline after a string of late-stage disappointments as well as a high attrition rate in earlier development stages, according to Malik.
“AstraZeneca has also stated that by 2010, it would like to see 20% of its starts into the pipeline being based on biologicals – this is a tall order given its current scale,” he said adding that with £3.1 billion ($5.8bn) in cash it has the firepower to bid for Shire, if it issues about £4 billion of debt.
– Meanwhile, Shire has said it would support actions in the UK courts by Pfizer and Eisai to challenge the country’s National Institute for Health and Clinical Excellence (NICE) decision to deny the use of treatments for Alzheimer’s disease by patients in the earlier stages of the disease.
