Shire nabs Bay Area's FerroKin, orphan drug in $325M buyout
Fresh off a disappointing decision to jerk its marketing application for Replagal, Shire ($SHPGY) bounced right back with its announcement that it has scooped up the Bay Area biotech FerroKin BioSciences in a $325 million deal. Shire is paying $100 million upfront for FerroKin, with the rest offered in potential milestones.
That's a big payday for a "backyard" biotech that won national attention in a 2011 feature in The Atlantic. Founder and CEO Dr. Hugh Young Rienhoff operated the company from his house, with a virtual staff of 7 and 60 vendors offering outsourced support. Rienhoff told The Atlantic he had raised a total of $27 million for the company.
The biotech fits snugly into Shire's orphan drug strategy. FerroKin has been gathering proof-of-concept data for FBS0701, which is designed to counter the iron overload anemic patients can suffer from after repeated transfusions of red blood cells. FBS0701 has won orphan status in both Europe and the U.S. In the summer of 2010 the biotech announced it had nailed down a $12 million financing round from current investors Burrill & Company, Clarus Ventures and MP Healthcare Venture Management, with Healthcap Ventures of Stockholm coming in as a new investor.
"There remains a significant unmet need for a once-a-day, oral iron chelator in a convenient dosage form for the treatment of transfusional iron overload with a better safety profile than currently available treatments," explained Shire hematology chief Ross Murdoch. "We believe FBS0701 has the potential to meet that need. We hope to use our expertise in hematology coupled with our proven ability to progress products through the development pipeline to bring FBS0701 to the global marketplace. This acquisition marks an important step for Shire in building a business that serves the growing needs of specialty hematologists and their patients."
The deal comes after FerroKin displayed some of its mid-stage data at ASH a few months ago. FerroKin completed four Phase I studies before launching its dose-ranging Phase II trials. Rienhoff will provide consulting services to Shire during the transition period.
- here's Shire's release