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Shire gains exclusive rights to Acceleron's molecules for muscular disorders outside North America

|Includes: Shire PLC (SHPG)

Specialty biopharmaceutical company Shire (LSE: SHP, NASDAQ: SHPGY) has announced the expansion of its Human Genetic Therapies pipeline through the exclusive license, in markets outside of North America, for the activin receptor type IIB (ActRIIB) class of molecules being developed by Acceleron Pharma, a private biotechnology company based in Cambridge, Massachusetts.

Under the terms of the agreement, Shire will make an upfront payment to Acceleron of $45 million.

The collaboration between the two companies will initially investigate ACE-031, Acceleron's lead ActRIIB drug candidate, currently in a Phase 2a trial for the treatment of patients with Duchenne Muscular Dystrophy (DMD), a fatal orphan muscle disease with no current treatment.

ACE-031 and other ActRIIB molecules also have the potential to be used in other muscular and neuromuscular disorders.

Shire and Acceleron will work on a worldwide development program to advance ACE-031 into a global Phase 2/3 clinical program designed to demonstrate disease modification in DMD patients.

Shire will use its Lexington, Massachusetts manufacturing facility to produce commercial supplies of the product for both parties.

If marketing authorization is received, Acceleron will commercialize ACE-031 in the U.S. and Canada, and Shire has the exclusive right to commercialize the therapy in the rest of the world.

Acceleron is eligible to receive additional development, regulatory and sales milestone payments of up to $165 million for the successful commercialization of ACE-031 in DMD and up to an additional $288 million for successful commercialization of other indications and molecules, and royalties on product sales.

"The structure of this collaboration allows Acceleron to retain commercial rights in North America, with the opportunity to build a highly valuable business while collaborating with an ideal partner for ACE-031," said CEO of Acceleron John Knopf.

The deal will expand Shire's pipeline into a new therapeutic area. Shire's 2010 outlook of adjusted earnings of $4.00 per ADS, which was recently announced in its second quarter earnings press release, is unchanged.

DMD is a debilitating and fatal genetic disorder characterized by the progressive loss of muscle strength and function. It primarily affects boys and occurs in approximately 1 in every 3,500 live male births. It is caused by genetic mutations that result in the absence of dystrophin, a protein necessary to maintain the structural integrity of muscle fibers.

ACE-031 is an investigational protein therapeutic designed to build muscle and increase strength by inhibiting signaling through a cell surface receptor called activin receptor type IIB (ActRIIB).

Shire focuses its business on attention deficit hyperactivity disorder (ADHD), human genetic therapies (NYSE:HGT) and gastrointestinal (NYSE:GI) diseases.

The company was up more than 2% on the Nasadaq to $68.54 as of 12:40pm ET on Thursday.

Disclosure: no positions