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M&A Continues to Dominate the Rare Diseases Landscape

Alexion took everyone by surprise in recent weeks by announcing a very sizable acquisition of Boston-based Synageva for $8.4bn. This was a significant deal which will only serve to strengthen valuations of rare disease biotechnology companies, which continue to be in the M&A cross-hairs of both pharmaceutical and big-biotech companies.

In the background, SOBI has been fielding an acquisition approach, rumoured to be by Pfizer for around $5bn. This company, now under the leadership of Geoffrey McDonough (ex-Genzyme) and his recently assembled executive management team, has been seriously transformed and its success is clearly pricking the interest of acquisitively minded pharma companies who have ambitions in the rare diseases category. However today, SOBI declared that it had declined the approach and that it would be focused on building an independent company, which would involve a much anticipated upcoming drug launch. No doubt the fact that the discussions were allowed to continue over several weeks will serve notice to other suitors that the SOBI board of directors would have open-ears for other offers.

Almost by the time SOBI had put out the PR, the international news wires were alight with the speculation of a possible deal between Shire and Actelion. Under Flemming Ornskov, Shire has been highly acquisitive and has already rolled-up two notable rare disease biotechs in Viropharm and NPS Pharmaceuticals. However, Shire is very keen to keep up the buying intent and having committed to investors that it would be a $10bn revenue company by 2020 during the Abbvie hiatus, it is focused on executing against this target. Actelion, which with a strengthened portfolio of drugs in PAH has been enjoying a good deal of positive investor sentiment, is apparently the subject of a near $19bn approach from Shire. Actelion is a Swiss company and would perhaps offer some operational and product synergies with Shire, making the deal quite logical.

All of this deal making and speculation point towards a very active and dynamic orphan drug sector with many interested parties looking  to find a way to strengthen their portfolio of rare disease assets.

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