Winners & Losers: Shire Hands Back Juvista As Renovo Sinks

Shire's made some brilliant calls over the years. Buying genetic-diseases-focused Transkaryotic Therapies in 2005 for $1.57 billion was just one of them; the deal not only looks dirt cheap against Sanofi Aventis' tortured and expensive ($20 billion!) purchase of Genzyme, but also turned into what is now Shire's fastest-growing division, Human Genetic Therapies. (Yeah, ok, the 1997 Richwood purchase was another; with that $160 million deal came Adderall, the company-maker. But we digress.)

So Shire got the big things right. These days, thanks in part to some happy regulatory news, its shares are trading at an all-time-high (but maybe not high enough to prevent a take-out...oh dear we're digressing again.) One of Shire's smaller deals didn't work out, though: late on Wednesday evening it handed back rights to scar revision treatment Juvista to its maker, Renovo, after Phase III trials failed. Shire had already started to get cold feet on the drug in March 2010, after some equivocal Phase II results in certain settings, so in a damage-limitation move, it decided not to start U.S. trials (the ones it was due to fund) before seeing the results of E.U. trials (which Renovo funded).

The $75 million in up-front cash and $50 million equity that Shire paid for the drug in 2007 begins to look like small change in the context of Shire's $3 billion plus 2010 sales. Spare a thought, though, for Renovo, which is cutting 100 staff (estimated headcount: 110) and yes, dropping Juvista. Prof. Mark Ferguson, Renovo's founder and CEO, sounded utterly perplexed at how the Phase III trial could have faltered, given Phase II results showing some lovely scar healing. Call it "doing drug development". And call it a bit of a trend right now -- sadly -- in U.K. biotech. (We aren't looking at you, Antisoma.)

So we must look back to Shire, then, for our lessons in success. (Shire was a U.K.-based company once, before it moved its HQ to Ireland in 2008 for tax reasons.) And we must listen to CEO Angus Russell on April 1, one of the keynotes at BIO/Windhover's Pharmaceutical Strategic Outlook conference. The topic: how to apply the value-proving, unmet-need-fulfilling principles so core to rare diseases to the wider, less niche-y parts of the portfolio, including ADHD and GI. (If you're there, you can ask about any potential lessons from Juvista, too.)

image by flickrer Gary Simmons used under creative commons