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 Is ViroPharma getting ready to sell itself? Sanofi Said Eying ViroPharma Is Sanofi interested in acquiring ViroPharma? Other Stocks in the News Will Smart Pills Revolutionize Health Care? Are smart pills the next convergence of tech and medicine? Does This Orphan Leukemia Treatment Have Blockbuster Potential? Will this treatment cause this company's shares to skyrocket? Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Sep 17, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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