Shire, Microsoft and EURODIS Form Alliance to Shorten Diagnosis Times for Children with Rare Diseases

It’s no secret technology-based companies have been involved with healthcare for sometime, but on Tuesday (February 20), the industry faced the first of its kind.

Three influential companies, Shire (NASDAQ:SHPG), EURORDIS and Microsoft (NASDAQ:MSFT) released a joint statement, announcing the companies are teaming up to form the Global Commission to end the diagnostic odyssey for children to accelerate the time to diagnose children with rare diseases. This announcement could be the first of many alliances and partnerships in 2018 as tech companies attempt to revolutionize healthcare.

Around 300-350 million people are affected by rare diseases, with about half of the diseases beginning in childhood,  the Global Commission estimates. The organization believes the key to solving many of these diseases is a faster and more reliable diagnostic; up to 40 percent of rare disease patients are misdiagnosed more than once or the diagnosis is delayed.

The goal for the commission is to empower patients and their families to be more involved in healthcare, provide guidance for better health outcomes, and improve physicians ability to identify and diagnose patients.

Flemming Ornskov, CEO of Shire, said in the joint release that accelerating diagnosis times is “critical” to improving outcomes for not just patients, but health systems.

“This Global Commission is passionate about bringing forward new and personalized solutions in diagnostics and I’m confident our work will help to transform the lives of children living with a rare disease,” Ornskov said.

With the Global Commission beginning the framework in early 2018, the alliance expects that by early 2019 it will have a published roadmap of its findings over the next year.  Over the next 12 or so months, the Global Commission will look to gather information from patients and their families, as well as experts in the industry to gain insight to help speed up the process of diagnosing rare diseases.

Global Commission alliance: who are the companies?

Shire is a global biotechnology company focused on rare diseases is looking to reducing the financial burden for patients and the healthcare system. Some disorders the company is working to treat include bleeding disorders, ADHD and Hunter syndrome, among others. Shire has seven U.S. Food and Drug Administration (FDA) and 15 drug candidates in its Phase 3 clinical studies. In mid-February, the FDA accepted an application to expand the indication for Shire’s candidate Cinryze.

Seattle-based Microsoft is well-known as a technology first company set up a healthcare department in Cambridge September 2017, with the idea of using artificial intelligence software for healthcare. Microsoft has been working on other healthcare initiatives such as HealthVault, an online database for storing, using and sharing health information, and Azure for healthcare, a platform to develop solutions based on personalized healthcare.

EURORDIS-Rare Disease Europe is a non-profit alliance with over 700 rare disease patient organizations from over 60 countries working together to improve the lives of people living with rare diseases in Europe. The company provides patient empowerment and training, contributes to research policy and development, and promotes health policies.

Investor takeaway

Since Tuesday’s announcement, shares of Shire haven’t responded favorably, dipping 5.51 percent to close at $126.67. That said, in the last six months most analysts are still recommending a buy for the stock—including eight buy ratings and two hold.

On Monday (February 19), James Gordon, an analyst with J.P. Morgan downgraded the stock to a hold and lowered his price target for the shares to $150 from $200. Gordon made this decision as he doesn’t foresee many catalysts from the company in 2018 or 2019 other than a NeuroScience spinoff.

John Boris an analyst from SunTrust released his report on Tuesday, reiterating his buy rating but lowered his price target from $260 to $190.

Boris alludes the rating—contrary to Gordon—to, “the expected second-half of 2018 launch of Lanadelumab, as well as the strategic decision on the Neuroscience business, are potential upside catalysts for Shire,” said another article by The Fly. Based on analyst ratings, TipRanks predicts Shire’s stock price could rise to $235 or go as low as $150.

The most recent analyst rating for Microsoft is also a buy, this time from Tigress Research analyst Ivan Feinseth.

“MSFT also announced recent blockchain development partnerships with Accenture and Hapoalim using its new Coco framework. Accelerating adoption of Azure and Office 365 continue to be key catalysts and tailwinds for future growth,” Feinseth said, explaining his rating.

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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.