|Shire R&D chief Philip Vickers|
Shire ($SHPG) has signed a $225 million agreement to brighten its future in rare diseases, bolstering a major selling point for AbbVie ($ABBV) as the two prepare for a $54.7 billion merger.
Under the deal with Calabasas, CA's ArmaGen, Shire will hand over $15 million up front and up to $210 million more in equity investment and milestone payments to get its hands on a treatment for the rare Hunter syndrome. ArmaGen's candidate, AGT-182, is an orphan treatment designed to replace the missing enzyme at the root of the disease, in which buildups of cellular waste accumulate in tissues and organs, leading to serious complications and afflicting about one in 162,000 people, according to Shire.
Per the agreement, ArmaGen is solely responsible for a Phase I/II, which it expects to start before year's end. After that, Shire will step in and take full control of late-stage development and commercialization, the company said.
For Shire, the move dovetails with both its broad base of work in rare diseases and its efforts in Hunter's. The company's Elaprase, FDA approved in 2006, was the first marketed treatment for the disorder, and Shire is in the midst of Phase II with SHP-609, a treatment for the central nervous system manifestations of the disease that affect roughly two-thirds of Hunter's patients.
"Our agreement with ArmaGen marks our continued promise to the Hunter syndrome community to bring novel therapies that have the potential to dramatically redefine the treatment paradigm and address the most critical unmet needs," Shire R&D boss Philip Vickers said in a statement. "AGT-182 has the potential to be an important new therapy to our portfolio of programs for the treatment of both the CNS and somatic manifestations of Hunter syndrome."
Meanwhile, Shire expects to pull in $3 billion in revenue from its rare disease business by 2020, and AbbVie, on the line to acquire the Irish company for $54.7 billion in cash and stock, is similarly bullish about its future. The two expect to complete their union in the fourth quarter, talking up a combined company that will command a market cap of about $137 billion, employing more than 30,000 people at 9 R&D centers and 14 manufacturing operations around the world.
- read the announcement