ViroPharma (VPHM) Soars on Acquisition Chatter
Shares of ViroPharma (VPHM), which manufactures drugs for rare diseases, surged 28% last Friday after Bloomberg reported that the company had attracted buyout interest from Sanofi (SNY) and Shire (SHPG). ViroPharma has reportedly hired Goldman Sachs (GS) to investigate the possibility of a buyout.
ViroPharma initially received an unsolicited offer, which was followed by Goldman Sachs entering the picture to explore other potential suitors. The company's market cap has soared from $2 billion to $2.5 billion as a result. Daily Chart
Last quarter, ViroPharma reported a 10% year-on-year increase in revenue to $103.7 million, primarily attributed to sales of Cinryze, a treatment for hereditary angioedema. The company is currently unprofitable. ViroPharma is expected to release its third quarter results next month. Cinryze accounted for 76% of the company's total revenue in 2012, and due to the rarity of hereditary angioedema (1 in 10,000 to 50,000 people), the drug is protected as an orphan drug until 2015. Hereditary angioedema is a debilitating disease characterized by the swelling of the face, extremities, genitals, intestine, and respiratory system. Last quarter, Cinryze's sales rose 23% from the prior year quarter to $95 million -- accounting for 91.3% of the company's total revenue. The treatment is one of the world's most expensive drugs and costs $350,000 per year per patient. In addition to Cinryze, ViroPharma has products in its pipeline that treat cytomegalovirus (CMV) infection, C. difficile-associated diarrhea (CDAD), Friederich's Ataxia, and a new treatment for hereditary angioedema. It recently ended a trial with Halozyme (HALO
), which tested a recombinant human enzyme to allow for Cinryze to be delivered subcutaneously to patients. However, the trial was discontinued because several patients developed antibodies against the enzyme, which could result in adverse effects, although none were reported when the trial was halted. Shares of Halozyme and ViroPharma fell after the announcement, but Halozyme was hit much harder, since the trial caused some investors to doubt the safety of its cutting edge recombinant human enzyme technology. Both Sanofi and Shire, which are already highly diversified pharmaceutical companies, could gain further diversification and possible future growth by taking over ViroPharma's portfolio. If ViroPharma is taken over, it will be the latest high profile acquisition in a long line of biotech deals, which have risen 15% year-on-year to $70 billion this year. The biggest of these acquisitions was Amgen's (AMGN
) $10.4 billion takeover of Onyx Pharmaceuticals (ONXX
) earlier this year to take over the latter's oncology treatment portfolio. Other News About VPHM ViroPharma Said to Hire Goldman Amid Sanofi Interest
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Published on Sep 17, 2013
By Leo Sun