Washington Editor

Supernus Pharmaceuticals Inc. is open for business, in effect a continuation of the former Shire Laboratories Inc.

More or less a spin-off, the newly formed specialty pharmaceutical company began operations on its own after acquiring substantially all the product formulation and development assets of Shire Labs and completing a private equity sale. Based in Rockville, Md., Supernus raised $27.5 million from two venture capital firms, New Enterprise Associates and OrbiMed Advisors LLC, which also committed to add a total of $7.5 million more down the road to what essentially is a mid-stage company.

"Really, we've just changed the logo on the building," said Supernus President and CEO Jack Khattar. "The employees are the same, the facilities are the same, [as are] the technologies and intellectual property."

Formerly the head of Shire Labs, a subsidiary of Shire plc until the parent company began streamlining and restructuring its operations in recent years, Khattar founded Supernus to carry on a "very strong core foundation of expertise, technology and product development capabilities."

Among its key technologies are ProScreen and OptiScreen for lead selection and formulation optimization, the oral controlled-release technologies Microtrol, Solutrol and EnSoTrol, and Avert, its technology for lowering abuse potential. The company has yet to divulge details of portfolio products.

As Shire Labs, its technologies proved successful in developing a number of products now marketed by Chineham, UK-based Shire: the hyperactivity drug Adderall XR (dextroamphetamine), Carbatrol (carbamazepine) for epilepsy, and the bipolar product Equetro (carbamazepine). Also, the rosacea drug Oracea (doxycycline, from CollaGenex Pharmaceuticals Inc.) employs technology from Shire Labs.

"There's a very well-established, proven track record," Khattar told BioWorld Today, "and now we're going to focus all that energy, expertise and skill to build our own products. Historically, we've done all that for other people, so now we want to do it for ourselves."

Terms of the Shire Labs acquisition were not disclosed. The company originally was formed in 1990 as Pharmavene Inc., which Shire agreed in 1997 to acquire for more than £100 million, which today equals about $176 million.

Supernus plans to develop products internally and in concert with other pharmaceutical companies, including Shire if such a deal arises. And going forward, the company will follow Shire's lead in establishing its specialty focus to target niche therapeutic areas with a small sales force.

"Therefore, you can compete effectively as a small company," Khattar said, "and effectively build very strong relationships with these specialty physicians to promote your products."

Supernus, which employs fewer than 60 people, is following a model that has become more and more common in recent years as bigger drug companies watch their pipelines begin to run dry. Khattar explained that the drug industry "is really scrambling around to find new products." So pharmaceutical firms now rely on improved versions of existing drugs, so-called line extensions, which lengthen product life cycles.

While that speaks to a development void, these reformulated products at least come with known risk profiles, an important factor in today's safety-conscious environment.

Also, development timelines are shorter, which partly explains investor affinity for the specialty model. "Products are valuable these days," Khattar said, noting that Supernus' time to product success should prove shorter than the 10- to 15-year horizons typically forecast for earlier-stage investments.

New Enterprise Associates, with a nearby office in Baltimore, put $17.5 million into Supernus. New York-based OrbiMed invested the remainder. Khattar called the funding sufficient "for us to establish our pipeline and build pretty good, solid value in the company."

In conjunction with their financial support, the venture firms gained seats on Supernus' board: New Enterprise's Jim Barrett was named chairman, and colleague Chuck Newhall also joined the board, as did Mike Sheffery from OrbiMed. Khattar is the company's fourth board member.