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UK-based drugmaker Shire Pharmaceuticals has been boosted this week by the regulatory approval in Sweden of its kidney disease treatment Fosrenol. This breakthrough should now pave the way for wider European approval in the second half of 2004. With the upcoming patent expiry of Adderall putting future revenue at risk, Fosrenol has become a particularly significant drug for the future prospects of Shire. Earlier this week, Shire announced that it would pay up to $31 million to acquire the US and European patent rights to Fosrenol from AnorMed, the Vancouver-based biopharmaceutical firm which discovered the treatment. While Shire's key areas of focus include disorders of the central nervous system, oncology and gastrointestinal, the company's principal products are Adderall and Adderall XR for the treatment of ADHD. With most analysts agreeing that Shire Pharmaceuticals is over-reliant on Adderall, investors will be delighted with the Swedish regulatory approval of Fosrenol. Current positioningShire is a specialist pharmaceutical company that is focused on a small number of therapeutic areas. This allows the company to develop a strong position in these fields, enabling it to maximize its sales potential and to attract in-licensing opportunities. This success of this strategy was demonstrated in Shire’s domination of the ADHD market with Adderall. The company will now look to benefit from its considerable investment in R&D. Shire gained a promising early stage R&D pipeline through its purchase of BioChem Pharma in May 2001. The company then acquired MethyPatch, a methylphenidate transdermal delivery system for the once-daily treatment of ADHD, from Noven. Significantly, the launches of Fosrenol and MethyPatch will begin the process of diversifying risk away from the Adderall franchise. Shire holds an exclusive worldwide license to develop, manufacture, use and sell Fosrenol under patents owned by AnorMed. FosrenolFosrenol (lanthanum carbonate) is a treatment for high phosphate levels in the blood that occur in patients undergoing dialysis as a result of chronic kidney failure. Estimates show there are 269,000 dialysis patients in the US. Even with a low-phosphate diet, as many as 80% of dialysis patients develop hyperphosphatemia and need treatment with a phosphate binder such as Fosrenol. It is estimated that there are one million patients worldwide with end-stage renal disease. Shire believes that current therapies are not ideal: aluminum salts can cause bone and/or neural toxicity and are no longer widely used, and calcium salts are inefficient binders that require large doses and often cause hypercalcemia. Other treatment options involve a heavy pill burden and/or add to the patient’s fluid intake needs. In contrast, Fosrenol is formulated as a chewable tablet. Fosrenol will nevertheless, face direct competition in the shape of Genzyme’s Renagel, which generated around $160m in revenue in 2002, capturing a 40-45% share of the US market. Aside from possible pricing differences, Shire will expect Fosrenol to prove easier to use than Renagel’s 400mg and 800mg tablets, which can be difficult to swallow given the limited fluid intake of these patients. Set for launchFosrenol now looks on track to secure regulatory approval across Europe later this year. The drug's approval in Sweden will activate a process of automatic approval throughout the remaining EU states. Shire is also making progress in the US having received an 'approvable letter' from the FDA for Fosrenol for the treatment of hyperphosphatemia in ESRD. The company had hoped to launch the drug in the US at the end of 2003 but remains in manufacturing and labeling discussions with the FDA. Shire will determine what additional studies, if any, will be required, and whether these additional data will be required prior to approval or as part of post-marketing studies. "Our goal will be to launch Forenol throughout Europe by year-end," stated Shire's chief executive, Matthew Emmens. "In launching Fosrenol, we will make full use of our European infrastructure and build the platform for global success. We are also working with the FDA to gain marketing approval in the US, the world’s largest pharmaceuticals market." Fosrenol is expected to demonstrate strong uptake and Datamonitor forecasts sales of $101m by 2008. Shire will nevertheless need to continue to develop its product pipeline in order to build on the success achieved by Adderall. In spite of its aggressive M&A strategy, Shire has a strong balance sheet and healthy cash levels. This financial position should allow the company to integrate its acquisitions and to expand further. Related research:
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