Oct. 19--An Irish drugmaker that has been trying to woo Chicago-area drug company Baxalta Inc. since summer has run into a setback on a critical pipeline drug, raising questions about its ability to move ahead with the deal.
Shire Inc. said the Food and Drug Administration has requested an additional clinical study for lifitegrast, Shire's much anticipated experimental drug for dry-eye disease. That's a sign that the FDA considers the company's application inadequate and that approval is likely to be delayed.
The Wall Street Journal reported Monday that the latest development "adds to the anxiety" around Shire and its hostile bid for Baxalta.
"Shire's Baxalta Vision May Be Fading," said the Journal's headline. It reported that the company must now address questions about the strategic merits of a deal with Baxalta, along with the costs of what could turn into a protracted battle to complete an acquisition.
Shire's stock has declined 20 percent since it announced in August it wanted to buy Baxalta for $30 billion, using its stock as currency. Baxalta's stock has remained fairly steady over the same period.
Shire said Monday that it was not backing off on its pursuit of Baxalta. "Shire continues to believe the proposed Baxalta acquisition represents a highly strategic combination to create the global rare diseases leader delivering an expected $20 billion in sales by 2020," it said in response to questions from the Chicago Tribune.
Shire said it was "disappointed" in the FDA's response but added it expected to have data from a late-phase clinical trial on the drug before the end of the year. If the results are positive, the company plans to refile the drug for FDA review early next year. That could still allow it to launch the drug next year, the company said.
Analysts forecast that the drug could have generated annual sales of up to $1.5 billion. Shire last year had revenues of $6 billion, up 23 percent from a year earlier.
Shire has been focused on buying other drugmakers, including Baxalta, the former biosciences division of Baxter International that was spun off as an independent company this summer.
After Shire was rebuffed in August, Shire officials the following month told investors that the company was continuing to pursue the deal -- with enthusiasm and patience.
Around the same time, Baxalta's chief executive pointed out he was running a standalone company with a strategic plan and strong momentum, raising questions about whether he was interested in further talks with Shire.
Baxalta, based in the north suburb of Bannockburn, on Monday declined to comment on the latest events.
jrussell@tribupub.com
