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Feb 20, 2007

Shire Takes Control of ADHD Drug through $2.6B Acquisition of New River

  • Shire will buy New River Pharmaceuticals for $2.6 billion to gain full control of the potential successor to its attention-deficit drug, Adderall XR.

    In January 2005, Shire and New River signed a deal to develop Vyvanse for attention deficit and hyperactivity disorder (ADHD). While Adderall, which makes up more than half the company's sales, will lose patent protection in 2009, once approved, Vyvanse will enjoy protection until June 2023 in the U.S. and June 2024 in Europe.

    "This is an important and complementary acquisition that gives us full control of Vyvanse,” explains Matthew Emmens, CEO. “It will enable us to drive the launch and future development of Vyvanse and gain the full economic benefits of the drug. Based on Vyvanse’s expected profile, we believe it has the potential to be the next-generation stimulant product to Adderall XR.”

    Besides, launching Vyvanse for the pediatric indication, Shire expects to file an sNDA for the adult indication in the second quarter of 2007.  “This acquisition continues our leadership position in the growing U.S. ADHD market," states Emmens. Shire plans to introduce two other ADHD drugs this year.

    The U.S. ADHD market is worth $3.3 billion with current estimated annual prescription volume growth at 4%, according to Shire. The company expects to increase the prescription volume to 6% with the introduction of new products.
    The acquisition is valued at $64 per New River share. This represents a premium of about 9.5% over its closing price of $58.35 on Friday, February 16. 

    Upon completion, the transaction is likely to dilute earnings in the first two. The company predicts it will be neutral in 2009 and will significantly boost earnings thereafter. The tender offer is expected to commence by March 2, 2007 and to close early in April 2007.



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