Shire announces acquisition of Meritage Pharma

Shire plc (LSE: SHP, NASDAQ: SHPG) and Meritage Pharma, Inc. announced today that Shire has acquired Meritage, a privately-held company, for an upfront fee of $70 million and additional contingent payments based on the achievement of development and regulatory milestones. With the acquisition, Shire has acquired the global rights to-and undertaken the further development of-Meritage's Phase 3-ready compound, Oral Budesonide Suspension (OBS), for the treatment of adolescents and adults with eosinophilic esophagitis (EoE), a rare, chronic inflammatory gastrointestinal (GI) disease. This acquisition further enhances Shire's late-stage pipeline and builds upon the Company's rare disease and GI commercial infrastructure and expertise. Shire does not expect this acquisition to result in a change to its previously published earnings guidance for 2015.

Shire obtained the rights to acquire Meritage in connection with its acquisition of ViroPharma in 2014.

Shire's Head of Research and Development, Philip J. Vickers, Ph.D., commented:
"Shire's pipeline and strategic focus on rare diseases is further strengthened with the acquisition of Meritage, which also complements our strong GI capabilities. Adding this Phase 3-ready compound to our late-stage portfolio will allow us to leverage our expertise to further develop this important therapy that, if approved, will give hope to patients living with eosinophilic esophagitis."

Meritage's President and Chief Executive Officer, Elaine Phillips, Ph.D., commented:
"Meritage has worked closely with gastroenterologists, patients and their caregivers to develop Oral Budesonide Suspension, which was the first medication to significantly reduce eosinophilic inflammation and related symptom endpoints in patients with eosinophilic esophagitis in a Phase 2 clinical trial. The acquisition of Meritage by Shire, a global biotechnology company with GI and rare disease expertise, may benefit physicians and patients by helping develop OBS to potentially become the first approved treatment in the U.S. indicated for this often disabling disease."

EoE is a chronic disease that is increasingly being diagnosed in children and adults, with an estimated prevalence in the U.S. of ~181,000. It is characterized by inflammation and accumulation of a specific type of immune cell, called an eosinophil, in the esophagus. EoE patients may have persistent or relapsing symptoms related to esophageal dysfunction, which include dysphagia (difficulty swallowing) and food impaction.

OBS is a proprietary viscous oral formulation of budesonide that is designed to coat the esophagus where the drug can act locally. Budesonide is the active pharmaceutical ingredient in several products approved by the FDA, including products for the treatment of asthma, allergic rhinitis, ulcerative colitis and Crohn's disease. Budesonide is a corticosteroid and has an established safety profile in those diseases. The FDA has granted Orphan Drug Status designation to OBS for the treatment of patients with EoE.