Shire is leaping into a new business. The UK drugmaker has agreed to buy Advanced BioHealing, the maker of a diabetic foot ulcer treatment, for $750 million. Advanced BioHealing's Dermagraft skin-substitute product will become the cornerstone of a new Shire unit focused on regenerative medicine.
Dermagraft brought in about $146 million in 2010 sales, but Shire's leadership sees the opportunity to make it a much bigger product. For one thing, it's already in trials for a new use--treatment of venous leg ulcers. But the product also has the potential to expand in its present market, Shire's specialty pharma President Mike Cola said, because most patients with diabetic ulcers receive very simple, low-tech treatment. "We're talking about changing the practice of medicine" with Dermagraft, Cola told Bloomberg.
Obviously, the deal isn't just about Dermagraft. Advanced BioHealing will help Shire open new markets and will bring new manufacturing capabilities with it, Matrix analyst Navid Malik told the Wall Street Journal. The company also has an established sales force of 100 reps and relationships with wound-care centers, surgery centers and hospital customers. Advanced BioHealing CEO Kevin Rakin will head up the planned regenerative medicine business, which will operate as a semi-autonomous unit.
Once tightly focused on ADHD drugs, Shire has moved beyond that area in recent years with its "search-and-development" strategy of buying in promising drugs, the Telegraph notes. It has expanded into rare diseases, and in September purchased the gastrointestinal drugmaker Movetis, which makes Resolor*, a treatment for constipation.
*Editor's Note: This article incorrectly stated that Movetis makes Relistor.