Shire Plc’ share price up, to acquire NPS Pharmaceuticals in a deal estimated to $5.2 billion

The third-biggest drug manufacturer in the U.K., Shire Plc, said in an official statement that it reached an agreement to acquire NPS Pharmaceuticals Inc. at the price of $5.2 billion. The purchase is considered part of the companys efforts to expand its products range for medicines used to treat rare diseases.

The Chief Executive Officer of Shire, Flemming Ornskov, said in a telephone interview, cited by Bloomberg: “NPS has a rare-disease focus and in addition it builds on our strong expertise in gastrointestinal diseases. So it’s a strategic fit, growth enhancing, and we can afford it. It ticks almost all the boxes.” Mr. Ornskov also added in an interview for the Wall Street Journal that the acquisition of NPS is another step in the direction of becoming a biotech.

The companys CEO revealed that the deal could be finalized before the end of March. Shires Chief Executive Officer also explained the drug maker intends to continue following its plans for further expansion, seeking other deals.

Shire is to pay a price of $46 per share in cash, which represents a 9.8% premium to the closing price of NPS on January 9th. The U.K.-based drug manufacturer also revealed that the boards of both companies have already approved the deal.

The contract marks the first major deal after the negotiations between AbbVie and Shire failed and AbbVie scraped its attempts to acquire the British drug maker in October last year. The latter was given a breakup fee estimated to $1.6 billion after the tax-inversion deal fell apart, following some measures taken by the Obama administration to restrain such tax-lowering deals.

Shire was reported to have considered the purchase of NPS in May last year, but these rumours were left behind after it became clear that AbbVie was pursuing the company.

Stefan Quenneville, an analyst at Morningstar Inc., commented on the deal in an interview for Bloombwerg: “NPS fits right into what Shire wants to do and where they have infrastructure.”

Shire Plc gained 0.61% to trade at GBX 4 770 per share as of 8:45 GMT, marking a one-year increase of 63.69%. The company is valued at GBP 27.97 billion.