Shire (SHPG) will acquire ViroPharma Inc. (VPHM) for approximately $50 per share or $4.2 billion, in a bid to strengthen its portfolio of rare disease drugs. ViroPharma's lead drug, Cinryze, is approved in the U.S. for routine prophylaxis against angioedema attacks in adolescents and adults with hereditary HAE. Cinryze complements Shire's Firazyr, indicated for the on-demand treatment of acute HAE attacks.
The acquisition is structured as an all-cash tender offer for all the outstanding shares of ViroPharma common stock at a price of $50 per share. The remaining untendered shares of ViroPharma will be converted into a $50 cash per share consideration as in the tender offer.
Shire recently extended the expiration of its tender offer for all of the outstanding common shares of ViroPharma until the midnight of Jan 9, 2014 (New York City time) from the earlier schedule of 6:00 p.m. Dec 26, 2013.
Roughly 50,217,259 common shares of ViroPharma (76% of outstanding shares of ViroPharma) were tendered as of 6:00 p.m. on Dec 26, 2013.
Shire expects the addition of Cinryze to its rare disease business unit to propel revenues to over $2 billion in 2014, accounting for approximately 40% of Shire's total product sales. Moreover, Shire expects to realize approximately $150 million of annual cost synergies across the business by 2015 from the acquisition. The acquisition is expected to be immediately accretive to Shire’s bottom line.
Shire’s efforts to realign its business structure to drive growth and innovation are noteworthy. The impending acquisition of ViroPharma should significantly boost its rare disease portfolio and we expect accretion once the acquisition goes through.
Shire and ViroPharma both carry a Zacks Rank #3 (Hold). Investors may consider companies like Jazz Pharmaceuticals (JAZZ) and Questcor Pharmaceuticals Inc. (QCOR), which carry a Zacks Rank #1 (Strong Buy).