London-listed Shire has agreed to buy U.S. company ViroPharma for about $4.2 billion in cash to create a leading force in treatments for rare diseases.
Shire said on Monday it would pay $50 a share for ViroPharma, a 27 percent premium on Friday's closing price, for the company that makes Cinryze for the treatment of Hereditary Angioedema, a genetic immune disorder.
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A number of companies were interested in ViroPharma, including France's Sanofi, according to reports, attracted by its pipeline of drugs to treat conditions that affect small groups of people.
Rare diseases are already an important part of Shire's portfolio, including drugs to treat Gaucher's disease and Fabry disease, and it said buying Exton,
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Pennsylvania-based ViroPharma would create a unit with revenues of $2 billion a year.
ViroPharma is predicted to have annual revenues this year of $455-465 million.
Shire Chief Executive Flemming Ornskov said the deal was "entirely consistent with our clear strategic objective of strengthening our rare disease portfolio".
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Drugs designed to treat rare diseases that affect small numbers of people worldwide are being increasingly targeted by companies that are losing patent protection on conventional drugs and are not replenishing their pipelines fast enough.
Lazard and Morgan Stanley advised Shire on the deal and Goldman Sachs worked for ViroPharma.