Shire to acquire ViroPharma for $4.2 billion
The $50 per share price represents a 27% premium over ViroPharma's closing share price Nov. 8, 2013, the last trading day prior to the announcement, and a 64% premium over ViroPharma's share price of $30.47 on Sept. 12, 2013.
ViroPharma is a high-growth, rare disease biopharmaceutical company, whose commercial product Cinryze (C1 esterase inhibitor) is used for the prophylactic treatment of Hereditary Angioedema (HAE).
"It brings us a new growth driving product which augments our already strong growth prospects,” said Flemming Ornskov M.D., Shire’s CEO. “Shire is uniquely positioned to drive the continued success of Cinryze for the benefit of patients through our knowledge of the rare disease space, our international infrastructure and our biologics manufacturing experience. Shire's priority will be to ensure Cinryze patients continue to enjoy high standards of service."
Vincent J. Milano, ViroPharma's CEO, said, "By joining with Shire, ViroPharma will become part of a larger, more diverse biopharmaceutical company and will benefit from Shire's innovation, scale and global reach. We will have access to resources to expand product distribution, giving us a platform to provide our crucial therapies, such as Cinryze, to more patients than ever before. "
ViroPharma, which also has a number of other products, both marketed and in the pipeline, had total worldwide net revenues of $428 million in 2012. It forecasts total worldwide net revenues for 2013 be in the $445 million to $465 million range.
Shire believes there is a significant opportunity for future revenue growth, in both the U.S. and ex-U.S. markets, as new HAE patients are identified and treated and additional physicians gain experience with this important therapy. Current consensus estimates for global Cinryze sales forecast strong revenue growth. Cinryze has U.S. orphan drug exclusivity, which expires in 2015, and U.S. biologics data exclusivity until 2020.
The acquisition also brings ViroPharma's pipeline products to Shire, including two phase II products being investigated for infectious diseases: Maribavir, for the treatment of cytomegalovirus infection in transplant patients; and VP20621, for the prevention of recurrent Clostridium difficile infection. Also in the ViroPharma pipeline are VP-20629 for Friedreich's Ataxia, currently in phase I, and an option to acquire Meritage Pharma, which is conducting phase II trials with oral budesonide for the treatment of eosinophilic esophagitis.
ViroPharma also has sponsored or supported programs to examine potential new indications for Cinryze in Autoimmune Hemolytic Anemia, antibody-mediated rejection post renal transplantation and Neuromyelitis Optica.
Shire expects the addition of Cinryze to its rare disease business unit to create a growing $2 billion revenue business in 2014, which will represent approximately 40% of Shire's total product sales on a pro forma basis. Shire estimates it will realize approximately $150 million of annual cost synergies across the business by 2015, over and above the improved operating leverage already being driven by the ongoing One Shire reorganization.
Shire expects the acquisition will be accretive to Shire's Non GAAP EPS immediately and in the longer term. Shire also expects the transaction will deliver ROIC in excess of its weighted average cost of capital.