UPDATED: Shire nabs NPS's rare disease drug portfolio in $5.2B buyout

The rumors were true. Shire has struck a deal to buy NPS Pharma ($NPSP) and its rare disease drug portfolio for $46 a share, or $5.2 billion, making headlines for its go-it-alone strategy on the eve of the big JP Morgan conference in San Francisco.

The buyout comes at a hefty premium, beating out the standard markup that usually comes with an acquisition like this. Shire ($SHPG) is paying 51% more per share than the December 16 price, as NPS shares started to gyrate upward after rumors started to proliferate and then Goldman Sachs was brought in to field bids.

Shares of NPS closed at $41.91 on Friday.

Shire was always the logical buyer, particularly in light of AbbVie's ($ABBV) recent decision to drop its buyout of the Ireland-headquartered company after the feds changed the rules on tax inversions, making Shire significantly less appetizing as a takeover target. The failure of that deal left Shire--which has focused heavily on growing its orphan drug business--with a $1.6 billion breakup fee to add to its cash reserves, which analysts estimated at close to $13 billion.

That leaves more money available to strike more deals in the year ahead.

Shire CEO Flemming Ornskov

"The acquisition of NPS Pharma is a significant step in advancing Shire's strategy to become a leading biotechnology company," noted Shire CEO Flemming Ornskov, who wasted little time in lining up a series of acquisitions after he stepped into the top job. "With our global strength and expertise in both rare diseases and GI, Shire is uniquely positioned to drive the continued success of GATTEX/REVESTIVE, and, if approved, commercialize NPS Pharma's pipeline compound NATPARA/NATPAR."

NPS was eagerly awaiting the FDA's decision on Natpara--a treatment for the rare endocrine disorder hypoparathyroidism--as an October deadline neared. But the agency delayed its final ruling by three months, asking the biotech to submit a plan for evaluating the drug's safety after approval but, importantly, not demanding any further clinical trials.

The buyout will likely play in favor of the Lexington, MA, U.S. base for Shire. The company announced recently that it plans to transfer more than 500 jobs from Pennsylvania to Lexington--where it already has a staff of 1,300--as it looks to grow its presence in the big biotech hub.

The $5.2 billion deal comes as hundreds of dealmakers in the industry descend on JP Morgan's annual conference, where M&A prospects will be a top story line. More such deals are likely to start popping up in the hours and days to come.

- here's the release

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