Shire to Establish new Regenerative Medicine Business Unit Through Cash Acquisition of Advanced BioHealing, Inc., Including US Marketed DERMAGRAFT(R)
NASDAQ: SHPGY), the global specialty biopharmaceutical company, announces
that it has signed an agreement to acquire Advanced BioHealing, Inc.
- Creation of a new strategic platform based on tissue regeneration using cell-based therapies complements Shire's existing specialty focus and biologics manufacturing capability - Strong strategic fit with Shire - High medical need for symptomatic condition in growing and under-penetrated market, served by specialist physicians - A leading US marketed product for diabetic foot ulcers (DFUs) - Small specialised commercial team with a strong focus on customers and patients - Delivers value through satisfying high patient need - Purchase price of $750 million in cash, financed from Shire's existing cash resources - Closing of the transaction is subject to customary conditions, including obtaining anti-trust clearances - Adds DERMAGRAFT to Shire portfolio - attractive US marketed product with further growth potential - A regenerative bio-engineered skin substitute indicated for use in the treatment of diabetic foot ulcers greater than six weeks in duration - Already achieved 5% patient share of the potential $3 billion slow healing DFU market; $146 million in US sales in 2010 - Slow healing DFUs affect nearly 538,000(7) people annually in the US - Favorable reimbursement profile - Significant cost of not treating DFU effectively - Further growth prospects through potential expanded indication for Venous Leg Ulcers (VLU) - High regulatory, development and manufacturing hurdles for potential competitors - Combines Advanced BioHealing's world-class experience and commercial capability in regenerative medicine with Shire's strengths and expertise in human cell biological manufacturing - Opportunity to invest in and build - Leverage Shire's biological manufacturing expertise to improve Advanced BioHealing's manufacturing efficiency and expanding capacity - Improve disease awareness and prompt earlier medical intervention - Enhance Advanced BioHealing's already impressive commercial success with Shire's commercialisation expertise and international infrastructure - Platform to potentially acquire additional regenerative medicine assets - Value and growth enhancing. Shire confirms that its business continues to perform well. Due to the modest short term financial effect of the acquisition this year, there will be no impact to our previously stated guidance for 2011
“This acquisition is a strong and complementary strategic fit for Shire.
We will invest in the strengths of Advanced BioHealing’s specialist
commercial team, its manufacturing and its product development. The potential
to build on the success of DERMAGRAFT is attractive; it’s already a leading
product providing a solution for a common complication suffered by diabetics
in the US that, if not treated effectively, can lead to lower limb amputation
and high cost to patients and society. We believe there’s an opportunity to
create more value from DERMAGRAFT and Advanced BioHealing’s proprietary
technology and that with Advanced BioHealing’s team joining Shire, we can
build Advanced BioHealing into an exciting new business providing
regenerative medicine for patients’ unmet needs.”
continue to lead this business within the Shire organization, comments:
“This is a very exciting opportunity for all of us at Advanced BioHealing
to develop the business and deliver continued growth within a new environment
that is highly complementary and will provide great leverage for us. We all
look forward to being part of Shire.”
Strategic Rationale for the Transaction
Acquiring Advanced BioHealing brings both a US marketed product with
opportunity for further growth and world-class expertise in regenerative
medicine, enabling Shire to establish a new strategic business unit.
DERMAGRAFT treats a symptomatic condition, DFU, with a high level of
medical need. There are 538,000(7) cases of slow healing DFU annually in the
US. The condition is treated by specialist physicians (Shire’s core focus) in
wound care centers, select physicians’ offices, Veteran Affairs (VA) Medical
centers and clinics.
The World Health Organisation estimates an increase in incidence of
diabetes of 43% in
positively affect DERMAGRAFT growth prospects since diabetic patients have a
15%-25% lifetime risk of developing a DFU(8,9).
DERMAGRAFT is a leading treatment in the slow healing segment of the DFU
market and currently has a 5% share of that potential
DERMAGRAFT has a strong value proposition to patients, physicians and
payers; there are approximately 65,000(1) non-traumatic lower limb
amputations in the US performed in people with diabetes annually.
Comprehensive foot care programs that include foot-care education and
preventive therapy, treatment of foot problems, and referral to specialists,
can reduce amputation rates by 45% to 85%(1).
DERMAGRAFT has a favorable reimbursement profile, with Medicare (100%
coverage), more than 1,000 private plans, the Veteran’s Administration, and
numerous Medicaid programs.
Generic or similar products to DERMAGRAFT would have to overcome high
regulatory, development and manufacturing hurdles, including the performance
of long, costly clinical trials, to enter the DFU market.
Shire and Advanced BioHealing believe there is potential to improve
disease awareness and prompt earlier medical intervention. Shire will seek to
build on Advanced BioHealing’s already impressive commercial success with
Shire’s commercialisation expertise and international infrastructure.
With the acquisition Shire will own the global rights for DERMAGRAFT and
will continue to invest in the development of new indications and new
geographies, pending regulatory approvals.
Advanced BioHealing has fully enrolled multi-national trials (in US,
DERMAGRAFT for the treatment of Venous Leg Ulcers (VLUs); data is due in Q4
this year with anticipated US filing in Q1 2012. In the U.S., VLUs account
for the loss of 2 million working days and nearly
costs each year. Duration of treatment can last over a year in many cases,
and frequently involves the use of significant healthcare resources,
resulting in substantial costs for the U.S. healthcare system(2).
DERMAGRAFT is approved but not yet marketed for DFU in
undergoing dual review by both the biologics and medical device divisions.
Advanced BioHealing’s ongoing or planned submissions for DFU include
About Advanced BioHealing
Advanced BioHealing is a privately held leading regenerative medicine
company that develops, manufactures and commercializes living cell-based
therapies for regenerative medicine. Advanced BioHealing has over 400 full
time employees based in the US, including an in-house commercial team of over
150 professionals comprising sales, marketing, reimbursement and policy
professionals with backgrounds in the pharmaceutical, medical device and
biotechnology industries. The company, like Shire, focuses its small sales
team on specialist physicians.
Shire intends to retain Advanced BioHealing’s expertise and to invest in
building upon its world-class talent base to drive further value creation.
The Advanced BioHealing business will become part of Shire’s Specialty
Pharmaceuticals business, led by
manufacturing expertise from Shire’s Human Genetic Therapies business.
Advanced BioHealing has operations on three sites in the US: a
manufacturing facility in
order to meet future demand, Advanced BioHealing, under Shire’s ownership,
plans to expand its existing manufacturing capability and Shire will
supplement Advanced BioHealing’s current manufacturing functions with Shire’s
manufacturing process and quality assurance expertise.
DERMAGRAFT is a regenerative bio-engineered skin substitute that assists
in restoring damaged tissue.
DERMAGRAFT is indicated for use in the treatment of full-thickness
diabetic foot ulcers greater than six weeks in duration, which extend through
the dermis, but without tendon, muscle, joint capsule, or bone exposure.
DERMAGRAFT should be used in conjunction with standard wound care regimens
and in patients that have adequate blood supply to the involved foot(6).
DERMAGRAFT consists of living cells and a bio absorbable mesh scaffold.
It is designed to stimulate healing in two ways: firstly, its mesh material
is gradually absorbed and the human cells grow into place and replace the
damaged skin and secondly, the living cells in DERMAGRAFT produce many of the
same proteins and growth factors found in healthy skin, which help replace
and rebuild the damaged tissue in the DFU.
Data from Advanced BioHealing’s 2001 pivotal clinical trial demonstrated
that the weekly application of DERMAGRAFT and conventional therapy for up to
eight weeks increased the proportion of DFUs of greater than six weeks
duration that achieved 100% closure at 12 weeks by 64%, a statistically
significant improvement, when compared to conventional therapy alone.
DERMAGRAFT is contraindicated for use in ulcers that have signs of
clinical infection or in ulcers with sinus grafts, and in patients with known
hypersensitivity to bovine products as it may contain trace amounts of bovine
proteins from the manufacturing medium and storage solution. Adverse events
observed in clinical trial included wound infection, osteomyelitis, and
About Diabetic Foot Ulcers (DFUs) and Venous Leg Ulcers (VLUs)
DFUs are open sores or ulcers on the feet that can occur in people with
diabetes as a result of peripheral neuropathy, or damage to nerves, and can
severely compromise a patient’s quality of life. Diabetic patients have a
15%-25% lifetime risk of developing a DFU(8,9).
VLUs are common in patients with a history of leg swelling, varicose
veins, or a history of blood clots in either the superficial or the deep
veins of the legs. VLUs affect 500,000 to 600,000 people in
every year and account for 80 to 90 percent of all leg ulcers(10).They are
treated in the same wound center and hospital locations as patients with DFU.
Closing of the transaction is subject to customary conditions, including
obtaining anti-trust clearances.
Barclays Capital is acting as financial adviser to Shire. BofA Merrill Lynch acted as financial adviser to Advanced BioHealing, Inc. Notes to editors SHIRE PLC
Shire’s strategic goal is to become the leading specialty
biopharmaceutical company that focuses on meeting the needs of the specialist
physician. Shire focuses its business on attention deficit hyperactivity
disorder (ADHD), human genetic therapies (HGT) and gastrointestinal (GI)
diseases as well as opportunities in other therapeutic areas to the extent
they arise through acquisitions. Shire’s in-licensing, merger and acquisition
efforts are focused on products in specialist markets with strong
intellectual property protection and global rights. Shire believes that a
carefully selected and balanced portfolio of products with strategically
aligned and relatively small-scale sales forces will deliver strong results.
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event such risks or uncertainties materialize, the Company’s results could be
materially adversely affected. The risks and uncertainties include, but are
not limited to, risks associated with: the inherent uncertainty of research,
development, approval, reimbursement, manufacturing and commercialization of
the Company’s Specialty Pharmaceutical and Human Genetic Therapies products,
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commercialization and/or development; government regulation of the Company’s
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(1) Centers for Disease Control and Prevention. National diabetes fact
sheet: national estimates and general information on diabetes and prediabetes
Services, Centers for Disease Control and Prevention, 2011.
(2) Drug Discovery & Development, Nexagon Greatly Reduces Venous Leg
(3) Lavery, et al. Evaluating the prevalence and incidence of foot
pathology in Mexican Americans and non-Hispanic whites from a diabetes
management cohort. Diabetes Care. 2006;26:1435-1438.
(4) Ramsey et al. Incidence, outcomes, and cost of foot ulcers in
patients with diabetes. Diabetes Care. 1999;22:382-387.
(5) Diabetic Foot Ulcer (DFU) Therapeutics – Pipeline Assessment and
Market Forecasts to 2017, GlobalData,
(6) DERMAGRAFT Prescribing Information.
(7) Margolis, et al. Diabetic healing of neuropathic foot ulcers
receiving standard treatment. A meta-analysis. Diabetes Care. 1999;
(8) Sanders LJ. Diabetes mellitus: prevention of amputation. J Am
Podiatric Assoc. 1994;84:322-328.
(9) Singh N, Armstrong DG, Lipsky BA. Preventing foot ulcers in patients
with diabetes. JAMA. 2005;293:217-28.
(10) Cleveland Clinic website, Lower Extremity (Foot and Leg) Ulcers. For further information please contact: Investor Eric Rojas (email@example.com) +1-781-482-0999 Relations Sarah Elton-Farr (firstname.lastname@example.org) +44(0)1256-894157 Media Jessica Mann (email@example.com) +44(0)1256-894-280 Matthew Cabrey (firstname.lastname@example.org) +1-484-595-8248
SOURCE Shire plc