West Coast Editor

A long-lasting, once-daily effect with even absorption of the active ingredient not only helped Vyvanse win FDA clearance for attention deficit hyperactivity disorder, but likely will make the road ahead easier for Shire plc and soon-to-be-acquired partner New River Pharmaceuticals Inc., as they push to switch prescribers from Adderall XR, Shire's ADHD capsule, which loses patent protection in 2009.

New River's stock (NASDAQ:NRPH) rose 7 cents to close at $63.33.

Last week, Basingstoke, UK-based Shire disclosed its plan to take over New River, of Radford, Va., for $2.6 billion in cash, or $64 per outstanding share, a 10 percent premium over the previous trading day's closing price. Analysts expected the move after Shire disclosed in October that it likely would receive only a third of the profits from Vyvanse (lisdexamfetamine dimesylate) after the first three years, and New River's stock has nearly doubled on takeover rumblings since October. (See BioWorld Today, Feb. 21, 2007.)

New River officials declined to comment on the deal, though Randal Kirk, chairman and CEO, said the company was delighted. Upon tendering his 50.2 percent ownership in the firm, Kirk will become a billionaire-plus.

The approval of the prodrug Vyvanse, formerly known as NRP104, laid firmly to rest any worries that the FDA might insist on more trials, as the agency demanded last year with Sparlon (modafinil), Frazier, Pa.-based Cephalon Inc.'s new formulation of the sleep drug Provigil. Cephalon decided last summer to drop the compound for ADHD rather than to keep doing trials. (See BioWorld Today, Aug. 11, 2006.)

Regulators smacked down Sparlon with a not-approvable letter, seemingly because of a single suspected case of a rare but serious skin rash called Stevens-Johnson syndrome. Analyst Russell McAllister with Merriman Curhan Ford in San Francisco told BioWorld Today that the decision might have been "making a statement about the proliferation of ADHD medications. It's too easy to get them and too many people take them."

Cephalon's strong-selling Provigil for narcolepsy, which contains the same active ingredient as Sparlon, is prescribed against ADHD, he noted. "Ninety percent of the use is off label because it's perceived to be very safe," McAllister said.

Shire spokesman Matthew Cabrey declined to comment about Sparlon, but doubted the FDA is less willing to approve ADHD therapies. "I don't think that's the case," he said.

Vyvanse will take on such stimulants as Ritalin (methylphenidate), from Novartis AG, of Basel, Switzerland, and Concerta (a different formulation of methylphenidate), from New Brunswick, N.J.-based Johnson & Johnson, which take a major share of the ADHD market.

Both are classed as Schedule II compounds, one of five slots established by the Controlled Substance Act of 1970. Schedule II also includes Shire's Adderall XR - which accounts for nearly half of Shire's revenue - and could include Vyvanse as well. That is what the FDA has proposed, though the U.S. Drug Enforcement Administration has yet to issue an edict.

"Anything could happen, obviously," Cabrey said, but added that Shire expects the DEA to follow the FDA's guidance. "We are exploring additional clinical studies that could help bolster a request for an altered schedule," he said.

Launch is expected in the second quarter, when Vyvanse will be available in three strengths: 30 mg, 50 mg and 70 mg, all indicated for once-daily dosing.

Vyvanse consists of d-amphetamine, covalently linked to l-lysine, a naturally occurring amino acid that is quickly absorbed from the gastrointestinal tract and converted to d-amphetamine.

"In terms of cardiovascular risk, the findings in [clinical studies with Vyvanse] are consistent with the known effects of stimulants" in other trials, Cabrey said. The black-box warning to be included with Vyvanse, he noted, relates to an FDA rule handed down last week regarding ADHD patient medication guides (given to patients and families when drugs are dispensed) and is not specific to Vyvanse. That warning applies to 15 marketed compounds, including Adderall XR, which is also a once-daily product.

Shire plans to file a supplemental new drug application in the second quarter for Vyvanse as a therapy for adults with ADHD. The overall market is estimated at about $3.3 billion, though as much as 75 percent of the adult population is undiagnosed or untreated.

More details of the buyout have emerged in SEC paperwork filed late last week. Shire entered a $2.3 billion facilities agreement with financial institutions, for which the lead arrangers were ABN AMRO Bank N.V., Barclays Capital, Citigroup Global Markets Ltd. and The Royal Bank of Scotland plc. The agreement comprises three parts: a $1 billion revolving facility, a $1 billion term loan facility and a term-facility valued at $0.30 billion.

The revolving facility matures Feb. 20, 2012, and may be used for general purposes as well as the buyout, but the term loan is solely for the New River takeover. Repayments start with $150 million on Feb. 20, 2008, another in the same amount the year after. The payback rises to $200 million on Feb. 20, 2010, and repeats that amount on Feb. 20, 2011, with the balance due in 2012.

Maturing Feb. 19, 2008, the $0.30 billion term loan is only to be used for the New River acquisition, and Shire holds the option to extend its maturity by 364 days.