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ViroPharma to Buy Lev Pharma

ViroPharma will pay $2.75 a share in cash and stock for the development-stage biotech.

ViroPharma

(VPHM)

is buying

Lev Pharmaceuticals

(LEVP)

, a deal that will add a late-stage drug targeting a rare genetic inflammatory disease to its pipeline, the companies announced Tuesday.

The purchase price is $442.9 million, or $2.75 a share, a 49% premium to Lev stock's closing price Monday. ViroPharma will pay $2.25 in cash and 50 cents a share in company stock.

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Lev is currently seeking U.S. Food and Drug Administration approval for Cinryze, a drug to treat hereditary angiodema (HAE), a rare and potentially fatal genetic disorder caused by a missing protein that results in swelling of the airway and other parts of the body. HAE affects about 10,000 people in the U.S.

The FDA is expected to issue an approval decision on Cinryze by Oct. 14.

ViroPharma currently markets an oral antibiotic, Vancocin, which generated $49 million in first-quarter sales. Investors have been concerned about the threat of generic competition for the drug in 2008 -- efforts that the company has been fighting. ViroPharma has another drug, Camvia, in phase III studies as a preventive treatment for cytomegalovirus.

In addition to the $442.9 million purchase price, ViroPharma agreed to pay up to another $1 a share to Lev shareholders contingent on FDA approval of Cinryze and if the drug reaches certain sales milestones.

Lev was trading up 56 cents, or 30%, at $2.41 in recent trading Tuesday, while ViroPharma shares were losing $2.27, or 18%, to $10.27.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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