Shire To Acquire ViroPharma For $4.2 Bln Cash To Expand Rare Diseases Business

(RTTNews) - Shire Plc. (SHP.L, SHPG) and ViroPharma Inc. (VPHM) Monday announced a merger agreement for Shire to acquire the rare disease company for $50 per share in cash, for a total consideration of about $4.2 billion. Boards of Directors of both companies have approved the deal.

Shire has secured a $2.6 billion fully underwritten short-term bank facility to finance the transaction, in addition to its cash and cash equivalents and its existing $1.2 billion revolving credit facility. The firm plans to refinance a portion of the short term bank facility through new debt issuance and the use of ViroPharma's cash and short term investments.

Following completion, Shire expects the deal to add to to its adjusted earnings per share immediately and in the longer term.

The offer price of $50 per share represents a 27 percent premium to ViroPharma's closing share price on November 8, the last trading day prior to the announcement.

Shire CEO Flemming Ornskov said, ''The acquisition of ViroPharma will immediately benefit Shire and is entirely consistent with our clear strategic objective of strengthening our rare disease portfolio. It brings us a new growth driving product which augments our already strong growth prospects.''

ViroPharma is a high growth, rare disease biopharmaceutical company. Its commercial product Cinryze is a leading brand for the prophylactic treatment of Hereditary Angioedema or HAE.

HAE is a rare genetic disease characterized by recurrent sudden attacks of swelling of the skin or the mucous membranes that can be disfiguring, painful and potentially life-threatening in the case of laryngeal attacks.

The deal is expected to create a $2 billion rare disease revenue base, while delivering further strong growth prospects.

Shire expects to realize $150 million of annual cost synergies across the business by 2015, above the improved operating leverage already being driven by the ongoing One Shire reorganization.

The offer is expected to close in the last quarter of 2013, the first quarter of 2014 or as soon as possible thereafter.

Through the deal, Shire expects to offer two complementary treatments - Firazyr for the treatment of acute HAE attacks and Cinryze for prophylactic treatment of patients suffering from HAE.

Cinryze was approved with orphan drug designation in October 2008. Launched in 2009, it has grown rapidly to generate revenues of $321 million in the U.S. in 2012.

On October 31, ViroPharma forecast Cinryze net revenues in North America in 2013 be between $395 million and $405 million.

Shire believes there is a significant opportunity for future revenue growth, in both the U.S. and other markets, as new HAE patients are identified and treated and as more physicians gain experience with this therapy.

Current consensus estimates for global Cinryze sales forecast strong revenue growth in the coming years. The drug has US orphan drug exclusivity which expires in 2015 and US biologics data exclusivity until 2020.

ViroPharma's portfolio of marketed products also includes Plenadren for adrenal insufficiency and Buccolam for prolonged seizures, both recently launched in major European countries. The company has two phase 2 products being investigated for infectious diseases.

Shire also plans to terminate its share buyback program. The company's Board of Directors will continue to review Shire's capital structure on an ongoing basis.

SHP.L settled at 2,796.00 pence on Friday, up 0.4 percent from the previous close.

VPHM closed up 2.7 percent on Friday at $39.38.