Shire sells off Dermagraft to Organogenesis

Shire has announced the divestiture of its Dermagraft assets to Organogenesis, which will assume all financial and management responsibility for the product from now on.

Dermagraft, a living skin substitute indicated for use in the treatment of full-thickness diabetic foot ulcers, has been sold off due to Shire's increased focus on its most promising products. A recent Medicare ruling regarding reimbursement for Dermagraft have reduced the commercial potential of the product significantly.

Shire will demand no upfront payment from Organogenesis, but is entitled to receive up to $300 million (182.49 million pounds) in total milestone payments, based on the achievement of certain annual net sales targets between now and 2018.

Dr Flemming Ornskov, chief executive officer of Shire, said: "We believe the best path forward for the patients who benefit from Dermagraft is to transfer it to new ownership in order to provide continued care and availability of their treatment."

The firm is also currently finalising its $4.2 billion takeover of ViroPharma, a move that will help to expand its presence in the rare diseases sector.