For ViroPharma, Acquisition Plan Is Paying Off

Thanks to the Food and Drug Administration's decision to approve the first U.S. treatment for hereditary angiodema, ViroPharma (VPHM Quote) has become the early leader in the race to sell a product for the rare genetic disorder to the domestic market.

That's because a company ViroPharma is planning to acquire -- Lev Pharmaceuticals -- received news Friday that U.S. regulators have cleared Cinryze to prevent painful attacks that occur in patients with the disease, which is also known as HAE.

Earlier this year, ViroPharma said it would spend at least $443 million to buy Lev, whose lead product is Cinryze. HAE treatments have been marketed in Europe for more than 30 years, but the U.S. has remained an untapped commercial opportunity.

HAE is caused by a defect in the gene C1 INH. The condition causes periodic acute episodes of painful swelling in a patient's extremities, gastrointestinal tract and, most dangerously, the air passages, which can lead to death by suffocation.

Treatments for rare diseases, such as HAE, can lead to big profits for their makers because they often carry high price tags. Cinryze could be launched at a price of $3,500 a dose, according to Rodman and Renshaw's Michael King and Stanford Research's Berin Amin.

An HAE drug approved in the preventive setting means substantially more revenue per patient -- $250,000 to $350,000 a year -- compared with an acute-treatment drug, which may cost about $25,000 a year per patient, said Susequehanna's Jason Kolbert earlier this year.