The Burrill Report


Shire said it will acquire U.S.-based ViroPharma for $4.2 billion, a deal in line with the company’s strategy to increase its focus on high-growth specialty markets.

The Ireland-domiciled pharmaceutical agreed to pay $50 per share for the rare disease specialist, representing a 27 percent premium to ViroPharma’s closing price prior to the announcement, and a 64 percent premium to ViroPharma’s closing price on September 12, 2013 before Bloomberg reported that both Shire and Sanofi were interested in the biotech.

“ViroPharma has been on Shire’s business development radar for some time,” said Shire CEO Flemming Ornskov during a conference call with analysts. “We are confident it provides an excellent fit for Shire in terms of products, revenue profile, and also in terms of culture.”

The deal, Shire’s biggest to date, reflects the company’s efforts to grow its rare disease portfolio and to diversify its revenue base, much of which currently comes from top-selling drug Vyvanse, its treatment for ADHD.

It follows an announcement just days before that confirmed Shire’s plans to refocus its early-stage development pipeline on rare diseases, discontinuing other projects and eliminating about 180 positions in its Basingstoke, U.K. research center, mostly in R&D.

ViroPharma markets Cinryze, a proprietary plasma-derived C1 esterase inhibitor, which is used to prevent swelling outbreaks in patients with hereditary angioedema, a rare disease characterized by painful swelling of the skin and mucosal membranes that in some cases can be life-threatening. It affects about 18,000 people in the United States and Europe. The drug was approved in 2008 and is projected to have sales of about $450 million in 2013. Treatment costs about $350,000 a year per patient.

Shire also markets a treatment for hereditary angioedema called Firazyr. Ornskov says Cinryze and Firazyr are complementary treatments. Firazyr is used as needed when a person suffers an acute attack while Cinryze is used as a prophylactic to prevent recurrent attacks. Offering both drugs provides a continuum of care for patients with hereditary angioedema, says Ornskov.

Revenue from rare disease products of the combined company is expected to be about $2 billion, or 40 percent of total product sales, as Shire seeks to build a balanced portfolio across several disease categories including rare diseases, neuroscience, gastrointestinal, regenerative medicine, and internal medicine.

ViroPharma’s pipeline also includes two investigational products in mid-stage development for infectious diseases: Maribavir for the treatment of cytomegalovirus infection in transplant patients; and VP20621 for the prevention of recurrent Clostridium difficile infection.

Shire expects annual cost synergies of about $150 million by 2015 for the combined company with the acquisition of ViroPharma to be accretive to its earnings per share both immediately and in the longer term. The transaction is expected to close by the end of the first quarter of 2014, subject to regulatory clearances.

ViroPharma is Shire’s fourth acquisition in 2013 and the fourth deal for a rare disease drug developer. During the first quarter of 2013 Shire bought three private biotechs: U.S.-based Lotus Tissue Repair and SARcode Biosciences, and Swedish biotech Premacure.

November 15, 2013
http://www.burrillreport.com/article-shire_to_buy_viropharma_for_4_2b.html