Deal-hungry Shire nabs Lumena for $260M-plus as M&A frenzy intensifies

Lumena CEO Mike Grey

Lumena won't be going through with that $75 million IPO after all. Shire is scooping up the company and its two development programs for rare liver diseases for $260 million in cash along with an undisclosed slate of milestones. The deal comes as analysts buzz about whether Shire ($SHPG) itself may be targeted for an acquisition by either AstraZeneca ($AZN) or Allergan ($AGN), which are both trying to wrestle out of the grip of an unwelcome buyout offer.

Shire is going about its business as usual, though, continuing its shopping spree under CEO Flemming Ornskov as the multinational biotech builds up its portfolio on rare diseases. This is the latest in a string of deals for Shire, which just days ago bought out Australia's Fibrotech for $75 million upfront and a string of undisclosed milestones, bringing in a lead drug for fibrosis.

Lumena's top prospect is LUM001, designed to prevent the buildup of bile acids in the liver. That drug is being put through a battery of 7 mid-stage studies. Lumena CEO Mike Grey had been planning to hustle that drug to the FDA for orphan cholestatic liver diseases, right after it finishes the relevent Phase II trials. Their other drug, the early-stage LUM002, is aimed at nonalcoholic steatohepatitis (NASH), a popular target in drug development circles.

For the time being the 17-member Lumena team will stay intact in San Diego, Grey tells FierceBiotech this morning. But eventually he expects that the work managing the therapies will move to Shire's rare disease team in Lexington, MA, adding that he's been fielding inquiries from several potential buyers since the company emerged from stealth mode about a year ago.

"We've had interest from quite a number of different companies over the last 10 months or so," he says. "Just as IPOs come in waves, M&A comes in waves. There are a lot of realignments in the business, in larger companies," with strategic transactions following their need to continue to build their pipelines.

Back in March New Enterprise Associates led a $45 million venture round for the San Diego-based Lumena, topping up the total for the biotech to $78 million in the three years since it was launched. Soon after the round Lumena filed an S-1 to go public as a big wave of biotechs migrated to Nasdaq. If nothing else, the IPO move gave Lumena an added bargaining chip as it negotiated with Shire.

One commonly used ploy in trying to fend off a hostile acquisition is to do some buying yourself. But the Lumena deal isn't big enough to fundamentally change Shire's value or ward off a buyout offer. On the other hand, every time M&A dealmaking heats up in biopharma, some analysts always put Shire on the list of likely targets. So far, though, nothing's come of it.

"Our pipeline and strategic focus on rare diseases is even further strengthened with the acquisition of Lumena Pharmaceuticals, which also complements our strong GI presence," said Ornskov a statement.

Noted Grey: "Shire has deep rare disease experience, a global infrastructure, and the commercial expertise to deliver LUM001 to patients around the world." 

- here's the release