After completing its $750 million acquisition of San Diego-based regenerative medicine company Advanced BioHealing (ABH) on June 28th, Irish drug giant Shire (NASDAQ: SHPGY) is going on a minor hiring binge.
ABH plans to hire 50 new employees in San Diego, according to ABH CEO Kevin Rakin. The company now employs 256 people at its manufacturing and laboratory space on Torrey Pines Mesa where ABH makes Dermagraft patches, which are bio-engineered from human skin cells and used as grafts to treat diabetic foot ulcers.
The deal was strategic for Shire in several ways, Rakin told me during a recent interview by phone. ABH is joining Shire’s Specialty Pharmaceuticals business, which enables ABH to also take advantage of the biologic manufacturing expertise in Shire’s Human Genetic Therapies business. While Shire also operates a major site in Switzerland and in the Philadelphia area, Rakin says the company gains a West Coast base with the ABH deal.
“They are a smart acquirer and a smart integrator,” said Rakin near his office in Westport, CT, home to an office of Canaan Partners, which helped to found ABH in 2006, and held roughly a one-third stake in the ABH. “They plan to use the ABH acquisition to network around the West Coast, and identify other companies and other technologies. So we are the cornerstone of a new business area for them.”
As I reported in May, the deal proved to be a windfall for Canaan. The venture firm is realizing an extraordinary 15x return for its $15 million investment in ABH.
Rakin, who was a Canaan executive-in-residence before joining ABH, told me the company’s business has been strong. Sales of ABH substitute skin patches grew from $9 million in 2007 to nearly $147 million in 2010, and is are expected to hit somewhere between $180 million and $200 million this year. ABH already has hired 151 employees so far this year, including 76 based in San Diego.
“We were just growing in concert with market demand, and in anticipation of our IPO,” said Rakin. ABH cancelled its IPO just a day before it was scheduled, after ABH and Shire had agreed on terms of the deal. ABH had set a price range between $14 to $16 a share for an offering of more than 13.4 million shares, which would have raised at least $187.6 million for the company.
Now ABH is looking to fill a variety of openings that range from research & development to operations, manufacturing, and warehouse shipping and receiving.
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