Shire Pays Over $260M Upfront in IPO Detour for San Diego’s Lumena

Shire Lumena Pharmaceuticals

rare diseases, or to Philadelphia, which has a Shire business unit focused on gastrointestinal drugs.

Lumena’s lead drug compound is in mid-stage development for four cholestatic liver diseases, two pediatric and two adult. Regulators in the U.S. and Europe have granted orphan drug status to LUM001 for treating Alagille Syndrome and several related cholestatic liver diseases. A second compound, LUM002, is ready to begin mid-stage trials for the treatment of non-alcoholic steatohepatitius.

In a statement today, Shire CEO Flemming Ornskov says, “These attractive potential treatments may offer new hope to patients with rare cholestatic liver disease and further contribute to Shire’s future growth. We are excited by the possibilities of these new assets in liver disease. We have the resources, the infrastructure and the operating capacity to invest in these new potential growth drivers which add further value to Shire’s innovative pipeline.”

Shire says the Lumena deal adds a new drug pipeline for its gastrointestinal business, which generated revenues of over $800 million in 2013. Shire said the deal also would be a good fit with its Fibrotech acquisition, which addresses unmet patient need in fibrotic conditions including renal impairment.

Lumena’s specialized focus in a particular group of orphan diseases, combined with a lead drug compound that already had undergone extensive testing by Pfizer, attracted buyout interest from a number of big pharma suitors, as well as strong venture support, Grey said. Before filing for an IPO in April, Lumena raised $45 million in a Series B round led by New Enterprise Associates. Adage Capital Management and RA Capital Management also participated, joining existing investors Pappas Ventures, RiverVest Venture Partners, and Alta Partners.

While the company was getting buyout feelers before filing for an IPO, the filing intensified the interest, and Grey said Lumena had multiple opportunities. Shire agreed to acquire Lumena for an upfront payment of $260 million in cash, plus a payment for net cash at closing, and near-term contingent milestone payments related to ongoing clinical trials.

Shire said it does not expect the acquisition of Lumena to result in a change to its previously stated earnings guidance for 2014.

Pages: Page 1, Page 2

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.