Shares in Shire Pharmaceuticals jumped more than 5 per cent yesterday, the best performance by a FTSE 100 stock, after the company disclosed that it was in advanced talks to buy in a new drug for hyperactive children.
The company has been under pressure to deliver on a promise to spend some of its £700m cash pile on new products before Adderall, its most lucrative existing drug, loses patent protection, perhaps as early as next year.
The company said it was close to signing a deal with New River Pharmaceuticals (NRP) of the US, whose amphetamine-based hyperactivity drug is in the third and final phase of human trials. It could be on the market shortly after the middle of 2006.
Shire is still haggling over the financial details of the deal, but it is likely to have to pay upfront and milestone payments of more than $100m (£53m) and a royalty rate of more than 20 per cent.
The two sides have set themselves a deadline of 31 January to conclude a deal. The announcement was first made late on New Year's Eve at the insistence of NRP because of its price sensitivity. NRP's shares have risen 16 per cent in two days, and Shire was up 30p to 577p yesterday.
Adderall, also a hyperactivity drug, accounts for 40 per cent of Shire's sales, and the NRP deal is one of several that Shire has promised to do to broaden its portfolio of drugs this year.
Shire said the new product has a benefit over Adderall because it is inactive until reaching the gut, making it less open to abuse.Reuse content