Shire Shells Out $100M to Buy Ferrokin Biosciences
Shire, the Dublin-based pharmaceutical company with operations in the Boston area, is paying $100 million upfront for a little San Francisco company seeking to help patients get rid of excessive amounts of iron in the blood.
Shire said today it is has agreed to pay $100 million upfront, plus another $225 million if future development and commercial goals are met, to acquire Ferrokin Biosciences. Shire said it is getting its hands on FBS0701, a once-daily capsule in mid-stage clinical trials, which has potential to reach the market “as early as 2016″ to treat iron overload following repeat blood transfusions. Shire, citing analyst estimates compiled by Evaluate Pharma, says this drug’s potential market is worth $900 million.
Ferrokin, founded by Hugh Young Reinhoff Jr. in 2007, has operated as a virtual company with a small number of employees that leaned on a network contractors to do much of the work. It raised $12 million in June 2010 from Existing investors Burrill & Co., Celgene, Clarus Ventures, HealthCap Ventures, and MP Healthcare Venture Management.
Reinhoff, and a few of Ferrokin’s key employees, will provide consulting services to Shire during a transition period, Shire said in a statement. “An important factor for FerroKin BioSciences in agreeing to this transaction was Shire’s drive, capability and vision to bring new products to the hematology market that promise to raise the standard of care for patients. In Shire’s hands, FBS0701 has greater potential to fulfill that promise,” Rienhoff said in a statement.