Shire plc, which partnered with New River Pharmaceuticals Inc. two years on a drug for attention deficit hyperactivity disorder, agreed to acquire the smaller firm for $2.6 billion in cash.

That news, which came only days before an expected FDA decision on Vyvanse in ADHD, was hardly unexpected, especially after Shire disclosed in October that it likely would receive only a third of Vyvanse profits after the first three years. That drug is expected to replace the pharma company's top-selling Adderall XR, an ADHD drug that accounts for nearly half of Shire's revenue but faces generic competition within the next couple of years.

Terms of the acquisition call for Basingstoke, UK-based Shire to pay $64 for each outstanding share of New River, which represents a modest 10 percent premium over Friday's closing price. Though it's a far cry from some of the latest industry acquisitions - such as Merck & Co. Inc.'s 102 percent premium bid for Sirna Therapeutics Inc. and Abbott Laboratories 56 percent premium for shares of Kos Pharmaceuticals Inc. - it likely takes into account the fact that New River's stock price has nearly doubled since early October on buyout speculation.

The acquisition price "matches our price target," analysts with First Albany Capital in New York wrote in a research note, "and on a split-adjusted basis, represents a 16-fold increase" from New River's $8-per-share initial public offering price in August 2004.

Shares of New River (NASDAQ:NRPH) gained $4.84 Tuesday to close at $63.19.

New River's founder, Chairman and CEO Randal Kirk said in a press release that the company was "delighted" with the transaction, though executives declined further comment.

Kirk, who owns 50.2 percent of New River, has agreed to tender all of his outstanding shares. The tender offer is expected to close in early April.

Upon close of the acquisition, Shire will hold all rights to Vyvanse (lisdexamfetamine dimesylate), an amphetamine conjugated to an amino acid. The product received its second approvable letter in pediatric patients in late December, and an approval could come later this week. The FDA set a PDUFA date of Feb. 24.

If approved, the oral, once-daily Vyvanse is expected to hit the market in the second quarter, following the Drug Enforcement Agency's drug classification. The FDA has recommended an abuse labeling of Schedule II, which would put Vyvanse in the same category as cocaine and morphine, along with other ADHD drugs, including Adderall XR. Shire and New River, however, have said they intend to seek a more favorable classification.

Shire expects filing a supplemental new drug application in the second quarter for treating adults with ADHD.

Overall, the U.S. ADHD market is estimated at about $3.3 billion, though as much as 75 percent of the adult ADHD population is undiagnosed or untreated. Existing products include stimulants such as Ritalin (methylphenidate, Novartis), Concerta (a different formulation of methylphenidate, Johnson & Johnson).

Among the other assets that Shire will gain is New River's cash, which totaled $162.8 million as of Oct. 1, 2006, and the rest of New River's drug pipeline, which includes NRP290, a conditionally bioreversible derivative of hydrocodone in Phase II testing for acute pain, and NRP409, which is in preclinical development as a replacement or supplemental therapy in patients with hypothyroidism and other indications.

Shire also gets the Radford, Va.-based company's Carrierwave technology, a process designed to create compounds comprised of active pharmaceutical ingredients bound to adjuvants. The aim of that technology is to develop amphetamine- and opioid-based products that are resistant to addiction and abuse.

Shire will fund the transaction through a $2.3 billion debt facility and $800,000 equity financing to fund acquisition.