|Shire CEO Flemming Ornskov|
Shire ($SHPG) CEO Flemming Ornskov has worked hard to get the company back on the M&A circuit after its $54 billion deal with AbbVie ($ABBV) fell through last year. As Ornskov figures, smart dealmaking could set Shire on track to join the ranks of Big Biotech and build out its portfolio in rare diseases. But Shire isn't going to settle for whatever comes its way.
As The Financial Times reports, Shire has rejected some deals because of high valuations, and Ornskov emphasized that it would remain financially disciplined. "We are prepared to wait for the right opportunity at the right valuation," he told the newspaper.
And the way he sees it, "there are lots of exciting opportunities out there," he said, as quoted by the FT. Shire will continue to scout out deals big and small to speed up its ascent, he added.
The Dublin drugmaker is no stranger to dealmaking. The company earlier this year snatched up GI specialist NPS Pharma for $5.2 billion to get its hands on the company's gastrointestinal drug Gattex and reduce its dependence on its ADHD blockbuster, Vyvanse. That came after its planned merger with AbbVie fell through in light of restrictive U.S. tax inversion rules. Since then, Shire has looked for opportunities to expand its rare disease portfolio, widening its net and looking at companies developing therapies to treat a limited number of patients. In particular, Ornskov has said he wants to target companies that focus on brain diseases, stomach, eyes, hormones and metabolism.
Ornskov is not the only top exec casting a wary eye toward frenzied pharma M&A. Valeant ($VRX) CEO J. Michael Pearson and GlaxoSmithKline ($GSK) chief Andrew Witty have criticized recent dealmaking, saying deals spurred by high valuations might be destined to fail. "In terms of prices being paid for acquisitions, some of them make sense and some of them don't make sense," Pearson said earlier this year. But Valeant is still forging ahead with acquisitions, snagging Salix, bankrupt biotech Dendreon's assets and most recently, Egypt's Amoun.
According to Witty, cheap money is causing companies to make "poor choices" when it comes to M&A--and the British helmsman is determined not to follow suit. "We're not going to get drawn into the idea that just because money is cheap we can do anything," he said earlier this year. Glaxo has kept quiet on the deal front since inking its multi-billion-dollar asset swap with Swiss drugmaker Novartis ($NVS) last year.
- read the Financial Times article
Special Report: Pharma's top 10 M&A deals of 2014 | The 25 most influential people in biopharma today - 2013 - Flemming Ornskov