|Shire CEO Flemming Ornskov|
It's cleanup time at Shire ($SHPG). The Lexington, MA-based biotech reported in its quarterly earnings today that it reached a deal to terminate its $260 million-plus buyout package for Lumena investors with a $90 million payoff as it assesses the bleak future of SHP625.
Shire CEO Flemming Ornskov was focused on bigger fish today, finally citing his continued interest--but not obsession--in pursuing a Baxalta buyout. Beating street estimates, Shire posted $725 million in earnings for Q3, according to Bloomberg, and Ornskov told reporters that there are several acquisition projects in the pipeline, without enlightening anyone as to what specific targets may be in mind.
At one point SHP625--which warranted a $260 million upfront payment--represented a key component in Shire CEO Flemming Ornskov's campaign to double revenue to the $20 billion mark by 2020. Then the drug flopped in a Phase II study back in April.
"On September 25, 2015 Shire reached agreement with the former shareholders of Lumena to terminate all future contingent milestone payments or obligations contemplated by the original share purchase agreement in exchange for $90 million," Shire noted. "Shire is currently analyzing the results of Phase 2 trials for SHP625 in Primary Biliary Cirrhosis, Progressive Familial Intrahepatic Cholestasis and Alagille Syndrome as well as a Phase 1b multiple dose study in SHP626 for the treatment of nonalcoholic steatohepatitis and continues to assess a path forward for these programs."
At one point Shire had projected $2 billion in peak sales for SHP625 and SHP626. The former LUM001 was designed to prevent the buildup of bile acids in the liver. When Shire acquired it, the drug was being put through a battery of 7 midstage studies. Then it failed the primary and secondary endpoints in the first study, casting a pall over the whole program.
One of the other big drugs in Shire's pipeline is lifitegrast, an eye drug that Ornskov also acquired which was recently rejected by the FDA based on the mixed results from the first Phase III study. Shire is planning to inspect the next set of Phase III results before the end of this year and plans to pursue a new application in early 2016, provided the data are positive.
Technically, Shire is based in Ireland for tax purposes. But Ornskov has settled into the company's Lexington, MA, hub, where he's been consolidating research operations.