Updated from 12:01 p.m. EDT

The board of

Transkaryotic Therapies


on Tuesday appealed to shareholders to approve the company's acquisition by

Shire Pharmaceuticals



Directors sent a letter to stockholders about two weeks after dissident holders said the Cambridge, Mass., biotechnology company could get a better price than the $37 a share offered by Shire when the U.K. drugmaker made its $1.6 billion cash bid in April.

"This transaction is the result of a rigorous process by the board of directors designed to maximize stockholder value, and we believe it represents the best possible price and optimal timing for stockholders," the letter reads.

Shareholders at Transkaryotic and Shire will vote separately on July 27. If both groups approve the transaction, Shire could take control as early as the next day because all regulatory matters have been settled.

One critic, Millenco LP, says the company could get a price ranging from the mid-$40s to the mid-$50s. Although Millenco hasn't said it would definitely vote against the deal, the New York-based private investment firm says it's "evaluating all options." The other critic, Porter Orlin LLC, a New York investment management firm, says Transkaryotic should postpone the shareholder vote for at least eight weeks to see if other bidders are interested.

These critics own just under 16% of the company's stock, but they can't vote all of their holdings. They acquired some shares after the June 10 cut-off date for being eligible to vote on the deal. So Millenco can only vote about 20% of its shares and Porter Orlin can vote about 65% of its shares.

Transkaryotic's largest shareholder, the Warburg Pincus investment banking firm, which owns 14%, supports the Shire acquisition. Among the opponents is Michael Astrue, who resigned as chief executive and a director of Transkaryotic after his board voted to accept Shire's bid.

Transkaryotic said Tuesday that the deal with Shire was structured so that it could entertain a higher bid and present the information to shareholders. "To date, no such approaches have been received," the letter indicates.

Dissidents' comments have helped push Transkaryotic's stock slightly above Shire's offer price. In recent days, the stock has been as high as $37.25; on Tuesday, it was trading at $37.16, up 3 cents.

Transkaryotic's detailed defense of its strategy notes that Shire approached the company in October at a time when the board was intent on remaining independent because "we were unlikely to be able to garner a significant acquisition premium."

Considering the company specializes in developing treatments for rare diseases, there are "only a handful" of potential suitors, some of which would run into antitrust roadblocks if they made a bid, the board's letter says.

Shire's initial offer of $29 to $31 a share was deemed inadequate by Transkaryotic's board. "We negotiated hard with Shire to obtain the best price," the letter says. The board rejected two bids and suspended talks at one point "until Shire was willing to commit to an attractive valuation."

The board's letter also addressed a key complaint of the critics, namely why Transkaryotic didn't wait until clinical trial results were available for an experimental drug that treats Hunter syndrome. Favorable results were announced on June 20, prompting the critics to say Transkaryotic sold out too soon for too little.

The $37-a-share price "is based on everything we know about our business as of today, including the positive top-line results" of the experimental drug I2S for Hunter syndrome, the board says, adding that the valuation reflected "our management's best case projections which assumed positive clinical trial results."