A year ago, when Shire PLC’s deal to be bought by AbbVie Inc. for $55 billion collapsed, chief executive Flemming Ornskov vowed to hunt for acquisitions of his own.
It wasn’t just talk by Shire, a Dublin-based company run out of Lexington that was getting a new lease on life.
On Monday, Shire unveiled a $5.9 billion agreement to buy Burlington’s Dyax Corp., which is developing a promising drug to treat a rare disease called hereditary angioendema. It’s the latest in a string of takeovers and buyout bids that have revealed Ornskov as one of the industry’s most aggressive deal makers.
“Shire’s message is, ‘We want to become one of the leading biotech companies in the world,” said David Steinberg, specialty phamaceuticals analyst for investment bank Jefferies LLC in San Francisco. “They’re certainly working hard at it, pursuing the companies with [rare disease] assets that give them faster growth for a longer period of time.”
Shire, which has 2,300 employees in Lexington, was set to be absorbed into North Chicago, Ill.-based AbbVie amid a wave of so-called inversions — transactions in which a US company combines with foreign one to gain that company’s lower tax rate.
The deals whipped up opposition in Washington, and the Obama administration pushed through rules that would make them less lucrative. AbbVie terminated the Shire purchase.
Since then, Shire has been on a takeover tear. It snapped up NPS Pharmaceuticals Inc. for $5.2 billion last January, and agreed to pay $300 million for Foresight Therapeutics Inc. in August before mounting an unsolicited $30 billion bid for Baxalta Inc., a Bannockburn, Ill.-based company that recently opened a research and development center in Cambridge.
Baxalta swiftly rejected the buyout offer as inadequate, but Shire says it is not giving up. Even while unveiling the buyout deal with Dyax, a 20-year-old biotech company with about 150 employees, Ornskov stressed in remarks to investors that Shire will continue to pursue Baxalta and other takeover prospects.
Ornskov said Shire will grow through both internal research and acquisitions. “We monitor companies,” he said in a conference call. “We look at when is the best time, so to speak, to approach a company. It fits squarely into the way we think about things.”
In an interview, Ornskov insisted the purchase of Dyax — which was approved by both companies’ boards and is expected to close in the first half of next year — won’t interfere with its pursuit of Baxalta. Under financial terms disclosed Monday, Shire will pay cash to buy Dyax, tapping into its roughly $12 billion in borrowing capacity. It hopes to acquire Baxalta, the former biopharma arm of health care giant Baxter International Inc., in a stock purchase.
Shire said it will pay $37.30 for each share of Dyax, a 35 percent premium over the target company’s closing price on Friday. If its drug candidate DX-2930 is approved, Dyax stockowners would get another $4 a share.
Shares of Dyax surged 28 percent Monday to $35.35 on Nasdaq. Shire’s shares dropped 1.04 percent to $224.86.
Dyax, which went public in 2000, is Shire’s first buyout in the Massachusetts biotech cluster since it established its presence here in 2005 by paying $1.6 billion to buy Cambridge-based Transkaryotic Therapies Inc., a maker of enzyme replacement therapies. The purchase of Dyax is expected to strengthen Shire’s franchise in rare disease treatments.
“They’re playing in areas where there’s little competition or no competition,” said Steinberg of Jefferies. “These are among the most important drugs around because the alternatives for many patients are death. So companies can get higher price points as a result.”
The agreement to buy Dyax would give Shire a drug candidate, called DX-2930, in late-stage clinical trials to treat hereditary angioedema, known as HAE. The debilitating and sometimes life-threatening rare genetic disorder causes swelling in the face, extremities and gastrointestinal tract. It affects an estimated 40,000 people around the world.
Shire already has two approved drugs for that condition, ringing up nearly $1 billion a year in sales, including a compound it acquired when it bought ViroPharma Inc. in 2013.
But the Dyax drug, an injectable biologic that works to prevent the disease and has proved effective for more than 90 percent of patients in clinical studies, is projected to generate peak sales of $2 billion annually if approved by US regulators. That approval would trigger an additional Shire payment to Dyax shareholders of about $646 million.
Ornskov called the Dyax experimental drug “probably the most efficacious product in the category and clearly a breakthrough” that could expand the market for HAE treatments.
Dyax, which went public in 2000, already has one drug on the market, sold under the brand name Kalbitor, treating a smaller patient population suffering from an acute form of the disease. That drug and two from rival drug makers Valeant Pharmaceuticals and CSL Behring, along with Shire’s own medicines, could lose sales to DX-2930.
Gustav A. Christensen, chief executive of Dyax, declined through a spokesman to discuss the acquisition. The companies have not said what role, if any, he will have with Shire after the buyout.
In the conference call with analysts, Christensen said the Shire deal “represents a substantial return to our shareholders.”
Other biopharma companies have also been working on HAE therapies but Shire is eager to become the leading players in that niche, analysts said.
The deal with Dyax “makes complete sense to us given Shire’s capabilities in [the] area and threat of competition,” Aaron “Ronny” Gal, senior analyst for the financial firm Sanford C. Bernstein and Co. in New York, wrote in a note to investors.