DUBLIN and EXTON, Pennsylvania, November 11, 2013 /PRNewswire/ --
Earnings accretive, revenue
growth-enhancing acquisition
Shire plc (LSE: SHP, NASDAQ: SHPG) and ViroPharma Incorporated
(NASDAQ: VPHM) today announce that their Boards of Directors have
unanimously approved, and the companies have entered into, a merger
agreement pursuant to which Shire will acquire all the outstanding
shares of the rare disease company ViroPharma for $50 per share in cash, for a total consideration
of approximately $4.2 billion.
The $50 per share price in the
transaction represents a 27% premium to ViroPharma's closing share
price on Friday, November 8, 2013,
the last trading day prior to announcement, and a 64% premium to
ViroPharma's unaffected share price of $30.47 on September 12,
2013.
ViroPharma is a high growth, rare disease biopharmaceutical
company, whose commercial product CINRYZE® (C1 esterase
inhibitor [human]), is a leading brand for the prophylactic
treatment of Hereditary Angioedema (HAE).
Shire transaction highlights
- Excellent strategic fit
- Expands rare disease portfolio which Shire is strategically
committed to strengthen
- Adds CINRYZE, with growing sales in the prophylactic
treatment of HAE, which complements Shire's FIRAZYR®
(icatibant injection)
- Enhances Shire's short and long term revenue growth
profile
- Expected annual cost synergies of approximately $150 million by 2015, over and above the improved
operating leverage already being driven by the ongoing One Shire reorganization
- Immediately accretive to Shire's Non GAAP EPS following
completion and enhances earnings growth profile
- Shire expects transaction to deliver ROIC in excess of its
weighted average cost of capital
- Acquisition to be effected by a tender offer and funded from
Shire's cash resources and existing and new bank
facilities
- Conference call for investors today (details below)
Shire Chief Executive Officer, Flemming Ornskov MD,
comments:
"The acquisition of ViroPharma will immediately benefit Shire
and is entirely consistent with our clear strategic objective of
strengthening our rare disease portfolio. It brings us a new growth
driving product which augments our already strong growth
prospects.
"Shire is uniquely positioned to drive the continued success of
CINRYZE for the benefit of patients through our knowledge of the
rare disease space, our international infrastructure and our
biologics manufacturing expertise.
"Shire is also excited by the prospect of being able to offer
two complementary treatments, FIRAZYR for the treatment of acute
HAE attacks and CINRYZE for prophylactic treatment of patients
suffering from HAE. Shire's priority will be to ensure CINRYZE
patients continue to enjoy high standards of service.
"Shire has conducted a thorough and collaborative due diligence
process over the last few months and, following completion of the
transaction, the integration process will be focused on delivering
value to all stakeholders. This acquisition is expected to create a
$2 billion[1]
rare disease revenue base and delivers further strong growth
prospects."
Vincent J. Milano, ViroPharma's
Chief Executive Officer, stated:
"We are pleased to announce our merger with Shire, which like
ViroPharma, is focused on developing products for patients
suffering from rare diseases.
"After thoroughly evaluating our strategic options we determined
that this transaction is in the best interests of ViroPharma, our
shareholders and our patients.
"By joining with Shire, ViroPharma will become part of a larger,
more diverse biopharmaceutical company and will benefit from
Shire's innovation, scale and global reach. We will have
access to resources to expand product distribution, giving us a
platform to provide our crucial therapies, such as CINRYZE, to more
patients than ever before. We look forward to working with
Shire's team and to being part of an even stronger, more
geographically diverse organization."
Further information on ViroPharma
ViroPharma is a leading rare disease company with CINRYZE, a
high growth product for prophylactic treatment of HAE, as well as a
number of other marketed products and a pipeline of product
candidates in the rare disease space. ViroPharma generated total
worldwide net revenues of $428
million in 2012. Total worldwide net revenues are forecast
by ViroPharma to be in the range of $445
million to $465 million in 2013.
Further information on CINRYZE
In the United States, CINRYZE
is indicated for routine prophylaxis against HAE attacks in
adolescent and adult patients.
HAE is a rare genetic disease characterized by recurrent sudden
attacks of swelling of the skin or the mucous membranes which can
be disfiguring, painful and potentially life-threatening in the
case of laryngeal attacks. Shire believes that of the approximately
8,000 patients in the U.S. with HAE, the disease is only actively
managed in about 3,500 patients.
CINRYZE was approved with orphan drug designation in
October 2008 and has grown rapidly
since launch in 2009 to generate revenues of $321 million in the U.S. in 2012. On October 31, 2013, ViroPharma forecasted CINRYZE
net revenues in North America in
2013 to be between $395 million and $405
million.
Shire believes there is a significant opportunity for future
revenue growth, in both the U.S. and ex-U.S. markets, as new HAE
patients are identified and treated and additional physicians gain
experience with this important therapy. Current consensus
estimates[(1)] for global CINRYZE sales
forecast strong revenue growth in the coming years. CINRYZE
has US orphan drug exclusivity which expires in 2015 and US
biologics data exclusivity until 2020.
With CINRYZE in its portfolio, Shire will be able to offer
broader outreach to HAE patients and a continuum of care alongside
FIRAZYR.
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.
Financing
Shire has secured a $2.6 billion
fully underwritten short term bank facility, which, in addition to
Shire's cash and cash equivalents and its existing $1.2 billion revolving credit facility, is
available to finance the transaction, pay fees and expenses related
to the transaction and repay Shire's existing $1.1 billion convertible bond at its maturity in
May 2014 if required. Shire plans to
refinance a portion of the short term bank facility through new
debt issuances and the use of ViroPharma's cash and short term
investments.
Share Buy-back program
Following the announcement of this transaction, Shire intends to
terminate its share buyback program. Shire's Board of Directors
will continue to review Shire's capital structure on an ongoing
basis.
Closing
The acquisition is structured as an all cash tender offer for
all the outstanding shares of ViroPharma common stock at a price of
$50 per share followed by a merger in
which each remaining untendered share of ViroPharma common stock
would be converted into the same $50
cash per share consideration as in the tender offer.
Closing of the transaction is subject to customary conditions,
including the tender of a majority of the outstanding ViroPharma
shares and the receipt of regulatory clearances. Pending anti-trust
authority clearances, it is anticipated that the transaction will
close in the last quarter of 2013, the first quarter of 2014 or as
soon as possible thereafter. The tender offer is not subject to a
financing contingency.
Lazard and Morgan Stanley are acting as joint financial advisors
to Shire.
Goldman, Sachs & Co. is acting as financial advisor to
ViroPharma. Davis Polk &
Wardwell LLP is acting as legal advisor to Shire and Skadden, Arps,
Slate, Meagher & Flom LLP is acting as legal advisor to
ViroPharma.
Conference Call with Shire CEO and CFO
Live conference call for
investors:
Flemming Ornskov, MD, Chief Executive Officer and Graham Hetherington, Chief Financial Officer
will host the investor and analyst conference call today (Monday
11 November 2013) at 08:30am GMT/03:30am
EST.
The details of the conference call are as follows:
UK dial in: 08082370030 or 02031394830
US dial in: 1 866 928 7517 or 1 718 873 9077
International Access Numbers: Click here
Password/Conf ID: 30849732#
Live Webcast: Register here for the live webcast
Replay:
A replay of the presentation will be available for two weeks by
phone and by webcast for three months. The details of the
replay are below:
Playback number: +44 (0)20 3426 2807
Playback UK toll free number: 0808 237 0026
Password/Conf ID: 643242#
Webcast replay Click here
NOTES TO EDITORS
Shire enables people with
life-altering conditions to lead better lives.
Shire's strategy is to focus on developing and marketing
innovative specialty medicines to meet significant unmet patient
needs.
Shire provides treatments in Neuroscience, Rare Diseases,
Gastrointestinal, Internal Medicine and Regenerative Medicine and
we are developing treatments for symptomatic conditions treated by
specialist physicians in other targeted therapeutic areas.
http://www.shire.com
About Hereditary Angioedema
HAE is a rare genetic disease caused by low levels or a
dysfunction of C1 esterase inhibitor (C1-INH). Reduced C1-INH
activity can lead to elevated plasma levels of bradykinin, which is
thought to be responsible for HAE symptoms.
HAE is characterized by recurrent sudden attacks of edema
(swelling) of the skin (hands, arms, feet, legs, thighs, face,
genitals) or the mucous membranes (gastrointestinal tract, larynx
or voicebox). The swelling can be disfiguring and painful,
especially in case of abdominal attacks. Laryngeal attacks are
potentially life-threatening due to the risk of suffocation. Unlike
angioedema caused by allergic reactions, signs and symptoms such as
hives and itching do not occur in HAE. Signs and symptoms of HAE do
not respond to standard treatments for allergic angioedema such as
epinephrine, corticosteroids, and antihistamines.
About FIRAZYR
FIRAZYR is currently approved in 41 countries worldwide,
including the countries of the European Union and the United States for the treatment of acute
attacks of HAE in adults.
After injection training, patients may self-administer
FIRAZYR. Most patients respond to a single dose of
FIRAZYR. If response is inadequate or if symptoms recur, up
to 2 additional doses may be administered within a 24 hour period
at intervals of at least 6 hours.
Important Safety Information
Because laryngeal attacks may be fatal, patients with laryngeal
symptoms should administer FIRAZYR and immediately seek medical
attention. The most commonly reported adverse reactions were
injection site reactions, which occurred in almost all patients
(97%) in clinical trials. These most frequently included redness
and swelling. Other common adverse reactions reported in at least
1% of patients included fever, transaminase increase, dizziness,
and rash.
Full U.S. prescribing information for FIRAZYR is available at
http://www.FIRAZYR.com. For more information about HAE visit
http://www.haea.org. Prescribing information may differ between
countries. Please consult your local prescribing information.
About ViroPharma
ViroPharma Incorporated is an international biopharmaceutical
company committed to developing and commercializing novel solutions
for physician specialists to address unmet medical needs of
patients living with diseases that have few if any clinical
therapeutic options.
ViroPharma is developing a portfolio of therapeutics for rare
and Orphan diseases including C1 esterase inhibitor deficiency,
cytomegalovirus (CMV), Friedreich's Ataxia, eosinophilic
esophagitis (EoE) and adrenal insufficiency. ViroPharma's goal is
to provide rewarding careers to employees, to create new standards
of care in the way serious diseases are treated, and to build
international partnerships with the patients, advocates, and health
care professionals it serves. ViroPharma's commercial products
address diseases including hereditary angioedema (HAE), seizures in
children and adolescents, adrenal insufficiency and C.
difficile-associated diarrhea (CDAD). For full U.S. prescribing
information on ViroPharma's products, please download the package
inserts at http://www.viropharma.com/Products.aspx; the prescribing
information for other countries can be found at
http://www.viropharma.com.
ViroPharma routinely posts information, including press
releases, which may be important to investors in the investor
relations and media sections of ViroPharma's web site,
http://www.viropharma.com. ViroPharma encourages investors to
consult these sections for more information on ViroPharma and its
business.
About CINRYZE (C1 esterase inhibitor
[human])
Cinryze is a highly purified, pasteurized and nanofiltered
plasma-derived C1 esterase inhibitor product. In the U.S.,
Cinryze is approved by the FDA for routine prophylaxis against
angioedema attacks in adolescent and adult patients with HAE.
In the E.U., the product is approved by the EMA for the
treatment and pre-procedure prevention of angioedema attacks in
adults and adolescents with HAE, and routine prevention of
angioedema attacks in adults and adolescents with severe and
recurrent attacks of HAE, who are intolerant to or insufficiently
protected by oral prevention treatments or patients who are
inadequately managed with repeated acute treatment. Cinryze is for
intravenous use only.
Severe hypersensitivity reactions to Cinryze may occur.
Thrombotic events have occurred in patients receiving Cinryze, and
in patients receiving off-label high dose C1 inhibitor
therapy. Monitor patients with known risk factors for
thrombotic events. With any blood or plasma derived product,
there may be a risk of transmission of infectious agents, e.g.
viruses and, theoretically, the CJD agent. The risk has been
reduced by screening donors for prior exposure to certain virus
infections and by manufacturing steps to reduce the risk of viral
transmission including pasteurization and nanofiltration.
The most common adverse reactions in clinical trials associated
with Cinryze were rash, headache, nausea, erythema, phlebitis and
local reactions at the injection site. Adverse events of
sinusitis and upper respiratory infection also were observed in
clinical trials. No drug-related serious adverse events were
reported in clinical trials.
Please visit http://www.viropharma.com/products/cinryze.aspx for
the full U.S. Prescribing Information; the prescribing information
for other countries can be found at
http://www.viropharma.com.
ADDITIONAL INFORMATION AND WHERE TO
FIND IT
This announcement is for informational purposes only and does
not constitute an offer to purchase or a solicitation of an offer
to sell ViroPharma common stock. The offer to buy ViroPharma common
stock will only be made pursuant to a tender offer statement
(including the offer to purchase, letter of transmittal and other
related tender offer materials). Investors and security holders are
urged to read both the tender offer statement (which will be filed
by Shire Pharmaceutical Holdings Ireland Limited (SPHIL) and a
subsidiary of SPHIL with the U.S. Securities and Exchange
Commission (SEC) and the solicitation/recommendation statement on
Schedule 14d-9 with respect to the tender offer (which will be
filed by ViroPharma with the SEC) when they become available
because they will contain important information, including the
terms and conditions of the offer. Investors and security
holders may obtain a free copy of these materials (when available)
and other documents filed by SPHIL and ViroPharma with the SEC at
the website maintained by the SEC at http://www.sec.gov. The tender
offer statement and related materials, and the
solicitation/recommendation statement, may also be obtained (when
available) for free by contacting Shire Investor Relations, at the
contact information listed below. ViroPharma also will
provide a copy of these materials without charge on its website at
http://www.viropharma.com under the "Investors" section.
Copies of these materials and any documentation relating to the
tender offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from any jurisdiction where to do so would be unlawful.
Footnotes
- Based on the most recent consensus estimates compiled by
Consensus Forecast Ltd, as of the date of this release, of combined
net revenues for Elaprase, Firazyr, Replagal and VPRIV for the year
ending December 31, 2013, available
on Shire's website
(http://www.shire.com/shireplc/en/investors/forecasts) and FactSet
consensus forecasts (downloaded November 4,
2013) for ViroPharma and for the year ending December 31, 2014 for Shire.
SHIRE FORWARD - LOOKING STATEMENTS
Statements included in this announcement that are not historical
facts are forward-looking statements. Forward-looking statements
involve a number of risks and uncertainties and are subject to
change at any time. In the event such risks or uncertainties
materialize, Shire's results could be materially adversely
affected. The risks and uncertainties include, but are not limited
to, that:
- Shire's products may not be a commercial success;
- revenues from ADDERALL XR are subject to generic erosion;
- the failure to obtain and maintain reimbursement, or an
adequate level of reimbursement, by third-party payors in a timely
manner for Shire's products may impact future revenues and
earnings;
- Shire relies on a single source for manufacture of certain of
its products and a disruption to the supply chain for those
products may result in Shire being unable to continue marketing or
developing a product or may result in Shire being unable to do so
on a commercially viable basis;
- Shire uses third party manufacturers to manufacture many of its
products and is reliant upon third party contractors for certain
goods and services, and any inability of these third party
manufacturers to manufacture products, or any failure of these
third party contractors to provide these goods and services, in
each case in accordance with its respective contractual
obligations, could adversely affect Shire's ability to manage its
manufacturing processes or to operate its business;
- the development, approval and manufacturing of Shire's products
is subject to extensive oversight by various regulatory agencies
and regulatory approvals or interventions associated with changes
to manufacturing sites, ingredients or manufacturing processes
could lead to significant delays, increase in operating costs, lost
product sales, an interruption of research activities or the delay
of new product launches;
- the actions of certain customers could affect Shire 's ability
to sell or market products profitably and fluctuations in buying or
distribution patterns by such customers could adversely impact
Shire's revenues, financial conditions or results of
operations;
- investigations or enforcement action by regulatory authorities
or law enforcement agencies relating to Shire's activities in the
highly regulated markets in which it operates may result in the
distraction of senior management, significant legal costs and the
payment of substantial compensation or fines;
- Shire's proposed acquisition of ViroPharma may not be
consummated due to the occurrence of an event, change or other
circumstances that gives rise to the termination of the merger
agreement;
- a governmental or regulatory approval required for the proposed
acquisition of ViroPharma may not obtained, or may be obtained
subject to conditions that are not anticipated, or another
condition to the closing of the proposed acquisition may not be
satisfied;
- ViroPharma may be unable to retain and hire key personnel
and/or maintain its relationships with customers, suppliers and
other business partners pending the consummation of the proposed
acquisition by Shire, or ViroPharma's business may be disrupted by
the proposed acquisition, including increased costs and diversion
of management time and resources;
- difficulties in integrating ViroPharma into Shire may lead to
the combined company not being able to realize the expected
operating efficiencies, cost savings, revenue enhancements,
synergies or other benefits at the time anticipated or at all;
and other risks and uncertainties detailed from time to time in
Shire's or ViroPharma's filings with the U.S. Securities and
Exchange Commission, including their respective most recent Annual
Reports on Form 10-K.
VIROPHARMA FORWARD - LOOKING
STATEMENTS
Statements contained or incorporated by reference in this
document contain information that includes or is based on
"forward-looking statements". These statements include
statements regarding planned completion of the offer and the
merger. We have tried, whenever possible, to identify such
statements by words such as "believes," "expects," "anticipates,"
"intends," "estimates," "plan," "projected," "forecast," "will,"
"may" or similar expressions. Because these statements
reflect our current views concerning future events and are based on
a number of assumptions that could ultimately prove inaccurate,
these forward-looking statements are subject to risks and
uncertainties including, but not limited to: all elements of our
financial guidance for 2013, our ability to continue to
successfully commercialize our products in the United States and Europe, the timing and results of anticipated
events in our clinical development programs, and our ability to
identify and execute upon business development opportunities.
Our actual results may vary depending on a variety of factors,
including:
- our ability to continue to identify and retain prophylaxis
Cinryze patients in the United
States and Europe at the
rate we anticipate, the total number of potential prophylaxis
Cinryze patients in the United
States and Europe and our
market share of HAE patients in the
United States and Europe;
- the size of the market, future growth potential and market
share for Buccolam and Plenadren in Europe;
- the availability of sufficient third party payer reimbursement
for each of our products in the United
States and Europe;
- fluctuations in wholesaler and SP order patterns and inventory
levels;
- competition from the approval of products which are currently
marketed for other indications by other companies or new
pharmaceuticals and technological advances to treat the conditions
addressed by Cinryze, Buccolam and Plenadren;
- changes in prescribing or procedural practices of physicians,
including off-label prescribing of products competitive with
Cinryze, Buccolam and Plenadren;
- manufacturing, supply or distribution interruptions, including
but not limited to our ability to acquire adequate supplies of
Cinryze and our other products in order to meet demand for each
product;
- our ability to receive regulatory approval for the use of
Cinryze for additional indications and routes of administration and
in additional territories in the timeframes we anticipate or at
all;
- the impact of healthcare reform legislation in the United States;
- actions by the FDA and EMA or other government regulatory
agencies;
- the timing and results of anticipated events in our clinical
development programs including studies with Cinryze subcutaneous
formulations, Cinryze for antibody mediated rejection, and
maribavir for treatment of CMV infections in transplant recipients;
and
- whether we pursue regulatory approval of Plenadren in
the United States.
Biologics such as Cinryze require processing steps that are more
difficult than those required for most chemical pharmaceuticals,
and as a result, Sanquin, our manufacturer of Cinryze has received
observations on Form 483 and a warning letter which require us to
continue to meet commitments made to the FDA related to various
manufacturing issues. In the event Sanquin fails to meet these
commitments, the FDA may take actions that limit our ability to
manufacture Cinryze. In the event Sanquin is not able to
manufacture the anticipated volume of product at the industrial
scale as a result of either FDA requirements, batch failures,
variability in batch yields, required maintenance or other causes,
we may not be able to satisfy patient demand or build safety stock.
Our inability to obtain adequate product supplies to satisfy our
patient demand may create opportunities for our competitors and we
will suffer a loss of potential future revenues.
Forward looking statements related to the transaction include:
the timing of the filings and approvals relating to the transaction
and the expected timing of the completion of the transaction;
uncertainties as to the percentage of the ViroPharma's stockholders
tendering their shares in the offer; the possibility that competing
offers will be made; the possibility that various closing
conditions for the transaction may not be satisfied or waived,
including that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the transaction or may
approve the transaction with certain burdensome conditions that may
result in a termination of the Merger Agreement; the effects of
disruption caused by the transaction making it more difficult to
maintain relationships with employees, collaborators, vendors and
other business partners; the risk that stockholder litigation in
connection with the transaction may result in significant costs of
defense, indemnification and liability; and other risks and
uncertainties discussed in the ViroPharma's filings with the SEC,
including the "Risk Factors" sections of the ViroPharma's most
recent annual report on Form 10-K and subsequent quarterly reports
on Form 10-Q, as well as the tender offer documents to be filed by
SPHIL and a subsidiary of SPHIL, and the
Solicitation/Recommendation Statement to be filed by
ViroPharma. These risks, uncertainties and other factors,
individually or in the aggregate, could cause actual results and
events to differ materially from those referred to in the
forward-looking statements. All forward-looking statements are
based on information currently available to ViroPharma, and
ViroPharma assumes no obligation to update any such forward-looking
statements.
For further information please
contact:
Investor Relations
For Shire:
Eric Rojas,
erojas@shire.com, +1-781-482-0999
Sarah Elton-Farr,
seltonfarr@shire.com, +44(0)1256-894157
For ViroPharma:
Robert A. Doody,
Robert.doody@viropharma.com, +1-610-321-6290
Media
For Shire:
Jessica Mann, jmann@shire.com,
+44(0)1256-894-280
Gwen Fisher, gfisher@shire.com,
+1-484-595-9836
For ViroPharma:
Paul Caminiti,
caminiti@sardverb.com, +1-212-687-8080
Robin Weinberg,
rweinberg@sardverb.com, +1-212-687-8080
Michael Henson,
mhenson@sardverb.com, +44(0)20-3178-8914