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Shire To Acquire ViroPharma In Strategic Move To Strengthen Rare Disease Portfolio; Will Augment Already Strong Growth Prospects

Stocks in this article: SHP SHPG VPHM

Additional value from ViroPharma's other marketed products and pipeline

ViroPharma's portfolio of marketed products also includes PLENADREN ® (hydrocortisone modified release) and BUCCOLAM ® (midazolam oromucosal solution), both recently launched in major European countries. PLENADREN is a product for adrenal insufficiency in adults. BUCCOLAM treats prolonged seizures in infants, children and adolescents.  

The acquisition also brings ViroPharma's pipeline products to Shire, including two phase 2 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 1, and an option to acquire Meritage Pharma, which is conducting phase 2 trials with oral budesonide for the treatment of eosinophilic esophagitis. ViroPharma has also 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 will review these programs as part of its regular pipeline review process to ensure that Shire's R&D resources are appropriately deployed to those projects that are both strategically relevant to Shire's commercial focus and have the greatest potential for success.

Financial benefit to Shire

Shire expects the addition of CINRYZE to its Rare Disease Business Unit to create a growing $2 billion revenue business [ 1 ] in 2014 which will represent approximately 40% of Shire's total product sales on a pro forma basis. The acquisition of ViroPharma is expected to enhance Shire's revenue growth profile in both the short and long term.

Related to the acquisition, Shire estimates that 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.

Following completion, Shire expects that the acquisition of ViroPharma will be accretive to Shire's Non GAAP EPS immediately and in the longer term. Shire also expects that the transaction will deliver ROIC in excess of its weighted average cost of capital.

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