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ViroPharma Soars on Buyout Rumors

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Shares of ViroPharma Inc. recently soared 28.42% on potential buyout rumors.

According to Bloomberg News, Sanofi (SNY - Free Report) and Shire (SHPG - Free Report) have shown interest in acquiring ViroPharma.

We remind investors that buyout rumors of ViroPharma have been doing rounds since Jun 2013 when it was rumored that several pharmaceutical companies have shown an interest in acquiring ViroPharma given the company’s orphan disease drug portfolio.

The company’s key drugs include Cinryze for hereditary angioedema (HAE), Plenadren for the treatment of adrenal insufficiency (AI), Buccolam in Europe for the treatment of pediatric seizures, and Vancocin for the treatment of C. difficile- associated diarrhea (CDAD).

We note that ViroPharma’s growth story currently revolves around Cinryze, which is approved in the U.S. for routine prophylaxis against angioedema attacks in adolescent and adult patients with HAE.

Cinryze accounted for 76% of total sales in 2012. In the EU, Cinryze received approval for routine prevention, pre-procedure prevention and acute treatment of angioedema attacks in adults and adolescents in 2011.

Cinrzye has been granted marketing exclusivity by the U.S. Food and Drug Administration (FDA) until 2015 under the Orphan Drug Act.

Moreover, in Aug 2012, the FDA approved a Prior Approval Supplement (PAS) to the Cinryze Biologics License Application (BLA) for industrial scale manufacturing.

ViroPharma has begun commercializing Buccolam in Europe paving the way for an additional revenue opportunity. Additionally, the acquisition of Plenadren in 2011 expanded the company’s orphan disease commercial product portfolio.

Meanwhile, an interesting candidate in ViroPharma’s pipeline is maribavir, being developed for the treatment of cytomegalovirus (CMV) infections in transplant recipients. ViroPharma received orphan drug designation in the EU for maribavir in Jun 2013 for the treatment of CMV in patients suffering from impaired cell mediated immunity.

Maribavir was granted the same designation in the U.S. in May 2011 for the treatment of clinically significant CMV and disease in at-risk patients.

We expect investor focus to remain on takeover updates. Shares have gone up 67.2% on a year-to-date basis and we expect further increase if the buyout rumors gather momentum.

ViroPharma currently carries a Zacks Rank #3 (Hold). Right now, Jazz Pharmaceuticals (JAZZ - Free Report) looks attractive with a Zacks Rank #2 (Buy).

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