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Pharma deals

January 12, 2015

Two major pharmaceuticals deals announced Monday suggest the industry will continue to consolidate. Deep pockets will be needed as medicines become both increasingly complex and targeted to smaller groups of patients.

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Medicine capsule (Photo: Frank May/dpa)
Image: picture-alliance/dpa/F. May

In a sign of continued consolidation in the global pharmaceuticals sector, Ireland's Shire on Monday agreed to buy NPS Pharmaceuticals for $5.2 billion (EUR 4.4 billion), while Switzerland's Roche also announced it would spend up to one billion euros for control of molecular and genomic analysis firm Foundation Medicine.

The deals suggest economies of scale will be required to fight ever rarer and more complex diseases. Rare diseases specialist Shire said the deal would boost its portfolio of specialized therapies, while Roche sought Foundation's experience in molecular and genomic analysis.

NPS Pharma CEO Francois Nader said "I am confident that this transaction will accelerate our ambition of creating a world where every person living with a rare disease has a therapy."

Cancer research in focus

Roche's agreement would see it spending around 650 million euros to gain a controlling stake of up to 56 percent in the US company in a bid to increase its strength in fighting rare forms of cancer. It will also purchase a further 250 million euros' worth of special shares and spend some 150 million euros to continue funding FMI's cancer research for at least five years.

Roche COO Daniel O'Day said "by combining FMI's pioneering approach to genomics and molecular information with Roche's expertise in the field of oncology, we can bring personalized healthcare in oncology to the next level."

Markets responded with a slight blip for Shire, but Roche gained nearly a percentage point on the news. The STOXX Europe-600 Healthcare Index rose 0.8 percent.

Sanofi also climbed 1.6 percent after the European Medicines Agency agreed to review an application by Sanofi and Regeneron for their cholesterol-lowering drug, alirocumab.

sgb/cjc (Reuters, AFP)