Skyrocketing rates of diabetes mean there’s still strong demand for Shire plc’s (NSDQ:SHPGY) Dermagraft diabetic foot ulcer treatment, according to CEO Angus Russell.
Russell defended the product despite a failed clinical trial that the company cut short late last month.
The Irish biopharmaceutical firm, which acquired Dermagraft in a $750 million buyout of Advanced BioHealing in June, said a Phase III clinical trial examining Dermagraft in treating venous leg ulcers failed to meet its primary endpoint: Complete healing after 16 weeks.
Though disappointed, Russell insisted that Dermagraft doesn’t need the additional indication to be an asset to the company’s portfolio.
"The whole deal was justified on diabetic foot ulcers alone," Russell said in an interview in New York yesterday, adding that approval for treatment of leg ulcers "would have been a quick kind of nice upside early after the acquisition. It would have been icing on the cake."
Dermagraft, which is cleared for treating diabetic foot ulcers, was owned by Smith & Nephew plc (NYSE:SNN), before the British health products giant abandoned it in 2005 after the FDA rejected it as a leg ulcer treatment. SNN then sold the rights to Advanced BioHealing in 2006.
Shire’s pickup of that company, just before ABH launched a projected $200 million IPO, was lauded as a "monster home run" for backers of the Westport, Mass.-based regenerative tissue products maker. It’s not clear what the Dermagraft decision means for Shire’s plans to build Advanced BioHealing into its regenerative tissue division.