Forming a specialty pharmaceutical company with worldwide reach
Shire Pharmaceuticals Group plc (Andover, UK) and BioChem Pharma Inc. (Laval, PQ, Canada) announced on December 11 that they will merge to form a specialty pharmaceutical company with global reach. The merger will be achieved through an exchange of shares which values, on the basis of the current price of Shire ADSs, each BioChem Share at US$37 and BioChem at approximately US $4.0.
When completed the merger will:
- Create one of the world's leading global specialty pharmaceutical companies;
- Broaden and enhances the product portfolio, with leading positions in ADHD and HIV, and deepens the project pipeline, with BioChem's early stage projects complementing those at a later stage in Shire
- Generate strong cashflow for reinvestment in the enlarged group's search and development strategy and, with opportunities for synergies, is expected to be accretive to Shire's earnings in the first full year
- Creates a larger, stronger company with combined revenues for the year ended 31 December 1999 of US $587 million.
Shire focuses on four therapeutic areas: central nervous system disorders, metabolic diseases, oncology, and gastroenterology. The group has a sales and marketing infrastructure with a broad portfolio of products, with its own direct marketing capability in the US, Canada, UK, Republic of Ireland, France, Germany, Italy, and Spain, and with plans to add Japan by 2004. Shire also covers other significant pharmaceutical markets indirectly through distributors and sales coverage continues to grow.
BioChem is a specialty pharmaceutical company specializes in infectious diseases and cancer. BioChem's first therapeutic product, 3TC/Epivir, has become the cornerstone of HIV infection/AIDS combination therapies, most recently being launched as part of GlaxoWellcome's Trizivir therapy. A second therapeutic product, Zeffix, an oral treatment for chronic hepatitis B, is currently being introduced in key markets worldwide by GlaxoWellcome, BioChem's partner for the development and commercialisation of both 3TC/Epivir and Zeffix.
The merger, which is expected to close in the second quarter of 2001, is subject to the usual shareholder and regulatory approvals.
Rolf Stahel, chief executive of Shire, sees the merger as an opportunity to build a strong specialty pharmaceutical. "We see significant benefits from combining these two companies," Stahel said. "It will further broaden and diversify our revenue base, strengthen our early phase project pipeline and provide greater financial strength to capitalise on our search and development capability."
Edited by Angelo DePalma
Managing Editor, Pharmaceutical Online and Drug Discovery Online