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INTERVIEW-UPDATE 2-Shire seeing M&A opportunity

Published 09/28/2010, 01:00 PM
Updated 09/28/2010, 01:04 PM

* CEO says seeing opportunity for M&A

* Adds orphan drugs to be as much as 40 percent of business

(Recasts, adds comment on M&A market and rare disease business)

By Ben Deighton

BRUSSELS, Sept 28 (Reuters) - British pharmaceutical firm Shire sees an opportunity for acquisitions as its Big Pharma rivals buy fewer early-stage research companies.

"Right now there's a window of opportunity for us (in terms of companies available to buy)," Chief Executive Angus Russell told Reuters in an interview on Tuesday.

He said early-stage drug research firms are running out of cash as investment has dried up, and because big pharmaceutical companies are looking instead to buy late-stage products to fill the hole left by patents expiring on their blockbuster drugs.

"They've deserted some of that earlier area, that's a great opportunity for Shire in our classic specialist and rare disease area," said Russell.

Large-cap drugmakers facing significant patent expirations and slowing growth or revenue declines include U.S.-based Bristol-Myers Squibb Co and Eli Lilly & Co, London-based AstraZeneca and Paris-based Sanofi-Aventis.

In August Shire said it planned to buy Belgium's Movetis NV for 428 million euros ($576.3 million) in cash.

UP TO 40 PERCENT

Russell added that he expects specialist drugs to represent as much as 40 percent of the company in coming years.

"There is some chance of human genetic therapy becoming a little bit bigger in the company but it seems to stay in this probably 35 to 40 percent range for the next few years," Russell said.

The company has developed an expertise in producing drugs for rare genetically inherited diseases and in August it raised its profit projections to 15 percent growth for the year, due to the strong performance of its specialist drugs.

It has benefited from production problems at U.S. rival Genzyme, with its Fabry disease drug Replagal taking share from Genzyme's Fabrazyme, and its Gaucher medicine Vpriv taking a proportion of Cerezyme.

Russell was in Brussels to promote orphan drugs to the EU. Orphan drug status in the United States and Europe was designed to encourage pharmaceutical companies to develop medicines for rare diseases. ($1=.7426 euro) (Additional reporting by Paul Sandle in London; Editing by David Cowell and Michael Shields)

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