Shire: Branching out
2011: $730 million
2010: $661.5 million
As a percentage of revenue: 20%
When Angus Russell joined Shire more than a decade ago, the company was primarily known for the blockbuster money it made from the ADHD drug Adderall. But while the ADHD drug Vyvanse now provides a big chunk of annual revenue, Russell has executed on a business plan that calls for expanding the reach of its mainstay therapies, growing a business for human genetic therapies and launching a new division for regenerative medicine. And Shire continued to load the pipeline through a series of small buyouts and licensing pacts.
Last year Shire bumped its R&D budget almost 10% as it looked to add new indications for Vyvanse. In August of last year Shire won a long campaign to gain FDA approval for Firazyr as a treatment for hereditary angioedema. There's also significant work under way to treat Sanfilippo syndrome.
Shire has been tracking down small biotechs focused on rare diseases and bolting them on to its operations. It acquired the Belgian biotech Movetis and its portfolio of GI drugs in 2010 for $565 million, adding that company's experimental drugs alongside the approved drug Resolor. Last year it acquired Advanced BioHealing for $750 million, creating a new unit for regenerative medicine. Then it followed up with a deal this year to buy the virtual biotech Pervasis to boost its regenerative medicine business in a deal worth a potential $200 million.
This year's deal roster includes the acquisition of the super-virtual FerroKin in a $350 million buyout. FerroKin was 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. And Shire also in-licensed a preclinical compound from Heptares for CNS disorders while its new pump delivery platform is generating some buzz on its potential in the orphan disease front as well.
There are clearly more deals on the way. At the end of 2011 Shire's HGT unit announced an arrangement in which it would pool capital with Atlas Venture to back new companies in the rare-disease field, giving Shire an inside track on valuable options for the most promising technology. Last fall Shire's HGT operation completed a new facility in Lexington, MA, opening the door to relocating 250 workers in Cambridge.
There have been setbacks along the way, of course. The March 2012 failure of a Phase III study of the bowel drug Lialda for diverticulitis left a mark. Shire's partnership with Renovo for the scarring drug Juvista collapsed on bad data last year. And some analysts are still scratching their heads over Shire's decision to scrap its BLA for Fabry disease drug Replagal, not quite sold on the explanation that the FDA was preparing to demand additional clinical studies that would have delayed any potential approval into the distant future.
Aggressively outsourcing Shire's development work has helped keep the staff down to a relatively modest 5,000. But Russell intriguingly suggested late last year that the company might be interested in launching one more new business operation.
Shire will continue to grow this year. And it's likely to stay focused on executing new deals that fit its carefully outlined business plan.