Shire will acquire NPS Pharmaceuticals for about $5.2 billion cash, the companies said Sunday, in a deal that expands the buyer’s gastrointestinal (GI) disorders and rare-disease portfolios, as well as its global footprint.

Both companies' boards have approved the deal, which is expected to close during the first quarter of this year—subject to conditions that include the tender of a majority of the outstanding NPS Pharma shares, and the receipt of Hart-Scott-Rodino clearance.

The Shire-NPS deal comes less than two weeks before NPS faces a key decision from the FDA—whether to approve its biologics license application (BLA) for Natpara, a parathyroid hormone (rhPTH [1-84]) that if approved would be the first bioengineered hormone replacement therapy for hypoparathyroidism (HPT). The drug’s PDUFA target date for a decision is January 24.

That date was delayed three months in October, after the FDA sought more time to review an amendment to NPS’ application, and requested the company submit a Risk Evaluation and Mitigation Strategy (REMS) for Natpara.

Natpara is also under review in Europe, where a marketing authorization application has been submitted.

NPS’ single marketed drug is Gattex (teduglutide [rDNA origin]), an injection drug indicated for long-term treatment of adults with short bowel syndrome (SBS) who need parenteral support. Gattex, the first approved GLP-2 analog approved for treating SBS, would complement Shire’s existing stable of drugs for gastrointestinal diseases.

“The acquisition of NPS Pharma is a significant step in advancing Shire's strategy to become a leading biotechnology company,” Shire CEO Flemming Ornskov, M.D., M.P.H., said in a statement. “We look forward to accelerating the growth of the NPS Pharma portfolio based on our proven track record of maximizing value from acquired assets and commercial execution. The NPS Pharma organization will be a welcome addition to Shire as we continue to help transform the lives of patients with rare diseases.”

Added Francois Nader, M.D., NPS Pharma’s president, CEO, and director: “We believe that joining our two companies will drive value for shareholders and ensure we continue to transform the lives of patients with short bowel syndrome, hypoparathyroidism, and autosomal dominant hypocalcemia worldwide.”

Gattex generated $67.9 million in net sales during the first three quarters of 2014, nearly triple the roughly $16.5 million recorded for Q1-3 2013.

In releasing third-quarter numbers on November 10, 2014, NPS predicted full-year net sales of Gattex “will be in the lower end of its guidance range of $100 and $110 million.” Those sales are expected to zoom further, to more than $300 million by 2016, according to analysts’ forecasts cited by Bloomberg News. NPS is in process of launching Gattex in Europe under the trade name Revestive.

NPS’ pipeline includes lead candidate NPSP795 for adults with autosomal dominant hypocalcemia, the subject of an ongoing Phase IIa study; and a new indication for teduglutide, pediatric SBS. NPS Pharma is now conducting a global study for teduglutide in pediatric patients with SBS who are dependent on parenteral support.

NPS has licensed several of its products through partnerships with several biopharma giants. Amgen markets cinacalcet HCl as Sensipar® in the U.S. and as Mimpara® in the EU; Janssen Pharmaceuticals markets tapentadol as Nucynta® in the U.S.; and Kyowa Hakko Kirin markets cinacalcet HCI as Regpara® in Japan, Hong Kong, Malaysia, Macau, Singapore, and Taiwan.

Shire said it anticipates achieving operating savings through cost-cutting or “synergies” beginning in 2016 and growing “substantially” thereafter. Shire said it anticipates synergies approximating 25-35% of the Street's consensus forecast of NPS Pharma's standalone future operating cost base from 2017 onward.

At $46 per share, the deal price reflects a 51% premium to NPS Pharma’s share price of $30.47 on December 16, 2014, when speculation about a Shire acquisition of NPS surfaced—but only a 9.8% premium from NPS’ closing price Friday of $41.91.

Shire plans to will finance the deal in part through a new $850 million fully underwritten short-term bank facility, in addition to Shire's cash and cash equivalents and an existing $2.1 billion five-year revolving credit facility. Shire plans to refinance the short-term bank facility, it said, by issuing new debt.

Previous articleDynamic Duo, a Dimeric Enzyme, Clobbers Oxidative Stress
Next articleTop 10 Wall Street Winners of 2014