Shire to acquire ViroPharma

Shire to acquire ViroPharma in strategic move to strengthen rare diseaseportfolio; will augment already strong growth prospects Earnings accretive, revenue growth-enhancing acquisition Dublin, Ireland and Exton, PA, US - November 11, 2013 - Shire plc (LSE: SHP,NASDAQ: SHPG) and ViroPharma Incorporated (NASDAQ: VPHM) today announce thattheir Boards of Directors have unanimously approved, and the companies haveentered into, a merger agreement pursuant to which Shire will acquire all theoutstanding shares of the rare disease company ViroPharma for $50 per share incash, for a total consideration of approximately $4.2 billion. The $50 pershare price in the transaction represents a 27% premium to ViroPharma's closingshare price on Friday, November 8, 2013, the last trading day prior toannouncement, 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, whosecommercial product CINRYZE® (C1 esterase inhibitor [human]), is a leading brandfor 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 entirelyconsistent with our clear strategic objective of strengthening our rare diseaseportfolio. It brings us a new growth driving product which augments our alreadystrong growth prospects. Shire is uniquely positioned to drive the continued success of CINRYZE for thebenefit of patients through our knowledge of the rare disease space, ourinternational infrastructure and our biologics manufacturing expertise. Shire is also excited by the prospect of being able to offer two complementarytreatments, FIRAZYR for the treatment of acute HAE attacks and CINRYZE forprophylactic treatment of patients suffering from HAE. Shire's priority will beto ensure CINRYZE patients continue to enjoy high standards of service. Shire has conducted a thorough and collaborative due diligence process over thelast few months and, following completion of the transaction, the integrationprocess will be focused on delivering value to all stakeholders. Thisacquisition is expected to create a $2 billion(1) rare disease revenue base anddelivers 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, isfocused on developing products for patients suffering from rare diseases. After thoroughly evaluating our strategic options we determined that thistransaction is in the best interests of ViroPharma, our shareholders and ourpatients. By joining with Shire, ViroPharma will become part of a larger, more diversebiopharmaceutical company and will benefit from Shire's innovation, scale andglobal reach. We will have access to resources to expand product distribution,giving us a platform to provide our crucial therapies, such as CINRYZE, to morepatients than ever before. We look forward to working with Shire's team and tobeing part of an even stronger, more geographically diverse organization." Further information on ViroPharma ViroPharma is a leading rare disease company with CINRYZE, a high growthproduct for prophylactic treatment of HAE, as well as a number of othermarketed products and a pipeline of product candidates in the rare diseasespace. ViroPharma generated total worldwide net revenues of $428 million in2012. Total worldwide net revenues are forecast by ViroPharma to be in therange of $445 million to $465 million in 2013. Further information on CINRYZE In the United States, CINRYZE is indicated for routine prophylaxis against HAEattacks in adolescent and adult patients. HAE is a rare genetic disease characterized by recurrent sudden attacks ofswelling of the skin or the mucous membranes which can be disfiguring, painfuland potentially life-threatening in the case of laryngeal attacks. Shirebelieves that of the approximately 8,000 patients in the U.S. with HAE, thedisease is only actively managed in about 3,500 patients. CINRYZE was approved with orphan drug designation in October 2008 and has grownrapidly 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 inNorth America in 2013 to be between $395 million and $405 million. Shire believes there is a significant opportunity for future revenue growth, inboth the U.S. and ex-U.S. markets, as new HAE patients are identified andtreated and additional physicians gain experience with this important therapy.Current consensus estimates(1) for global CINRYZE sales forecast strong revenuegrowth in the coming years. CINRYZE has US orphan drug exclusivity whichexpires in 2015 and US biologics data exclusivity until 2020. With CINRYZE in its portfolio, Shire will be able to offer broader outreach toHAE 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 oromucosalsolution), both recently launched in major European countries. PLENADREN is aproduct for adrenal insufficiency in adults. BUCCOLAM treats prolonged seizuresin infants, children and adolescents. The acquisition also brings ViroPharma's pipeline products to Shire, includingtwo phase 2 products being investigated for infectious diseases: Maribavir (forthe treatment of cytomegalovirus infection in transplant patients) and VP20621(for the prevention of recurrent Clostridium difficile infection). Also in theViroPharma pipeline are VP-20629 for Friedreich's Ataxia, currently in phase 1,and an option to acquire Meritage Pharma, which is conducting phase 2 trialswith oral budesonide for the treatment of eosinophilic esophagitis. ViroPharmahas also sponsored or supported programs to examine potential new indicationsfor CINRYZE in Autoimmune Hemolytic Anemia, Antibody-Mediated Rejection postrenal transplantation and Neuromyelitis Optica. Shire will review these programs as part of its regular pipeline review processto ensure that Shire's R&D resources are appropriately deployed to thoseprojects that are both strategically relevant to Shire's commercial focus andhave the greatest potential for success. Financial benefit to Shire Shire expects the addition of CINRYZE to its Rare Disease Business Unit tocreate a growing $2 billion revenue business(1) in 2014 which will representapproximately 40% of Shire's total product sales on a pro forma basis. Theacquisition of ViroPharma is expected to enhance Shire's revenue growth profilein 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 andabove the improved operating leverage already being driven by the ongoing OneShire reorganization. Following completion, Shire expects that the acquisition of ViroPharma will beaccretive to Shire's Non GAAP EPS immediately and in the longer term. Shirealso expects that the transaction will deliver ROIC in excess of its weightedaverage 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 $1.2billion revolving credit facility, is available to finance the transaction, payfees and expenses related to the transaction and repay Shire's existing $1.1billion convertible bond at its maturity in May 2014 if required. Shire plansto refinance a portion of the short term bank facility through new debtissuances 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 itsshare buyback program. Shire's Board of Directors will continue to reviewShire's capital structure on an ongoing basis. Closing The acquisition is structured as an all cash tender offer for all theoutstanding shares of ViroPharma common stock at a price of $50 per sharefollowed by a merger in which each remaining untendered share of ViroPharmacommon stock would be converted into the same $50 cash per share considerationas in the tender offer. Closing of the transaction is subject to customary conditions, including thetender of a majority of the outstanding ViroPharma shares and the receipt ofregulatory clearances. Pending anti-trust authority clearances, it isanticipated that the transaction will close in the last quarter of 2013, thefirst quarter of 2014 or as soon as possible thereafter. The tender offer isnot 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, ChiefFinancial 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 Click hereNumbers: 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 bywebcast for three months. The details of the replay are below: Playback number: +44 (0)20 3426 2807 Playback UK toll free 0808 237 0026number: Password/Conf ID: 643242# Webcast replay Click here For further information please contact: Investor Relations For Shire:Eric Rojas [email protected] +1 781 482 0999Sarah Elton-Farr [email protected] +44 1256 894157 For ViroPharma:Robert A. Doody [email protected] +1 610 321 6290 Media For Shire:Jessica Mann [email protected] +44 1256 894 280Gwen Fisher [email protected] +1 484 595 9836 For ViroPharma:Paul Caminiti [email protected] +1 212 687 8080Robin Weinberg [email protected] +1 212 687 8080Michael Henson [email protected] +44 20 3178 8914 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 specialtymedicines to meet significant unmet patient needs. Shire provides treatments in Neuroscience, Rare Diseases, Gastrointestinal,Internal Medicine and Regenerative Medicine and we are developing treatmentsfor symptomatic conditions treated by specialist physicians in other targetedtherapeutic areas. www.shire.com About Hereditary Angioedema HAE is a rare genetic disease caused by low levels or a dysfunction of C1esterase inhibitor (C1-INH). Reduced C1-INH activity can lead to elevatedplasma levels of bradykinin, which is thought to be responsible for HAEsymptoms. HAE is characterized by recurrent sudden attacks of edema (swelling) of theskin (hands, arms, feet, legs, thighs, face, genitals) or the mucous membranes(gastrointestinal tract, larynx or voicebox). The swelling can be disfiguringand painful, especially in case of abdominal attacks. Laryngeal attacks arepotentially life-threatening due to the risk of suffocation. Unlike angioedemacaused by allergic reactions, signs and symptoms such as hives and itching donot occur in HAE. Signs and symptoms of HAE do not respond to standardtreatments for allergic angioedema such as epinephrine, corticosteroids, andantihistamines. About FIRAZYR FIRAZYR is currently approved in 41 countries worldwide, including thecountries of the European Union and the United States for the treatment ofacute attacks of HAE in adults. After injection training, patients may self-administer FIRAZYR. Most patientsrespond to a single dose of FIRAZYR. If response is inadequate or if symptomsrecur, up to 2 additional doses may be administered within a 24 hour period atintervals of at least 6 hours. Important Safety Information Because laryngeal attacks may be fatal, patients with laryngeal symptoms shouldadminister FIRAZYR and immediately seek medical attention. The most commonlyreported adverse reactions were injection site reactions, which occurred inalmost all patients (97%) in clinical trials. These most frequently includedredness and swelling. Other common adverse reactions reported in at least 1% ofpatients included fever, transaminase increase, dizziness, and rash. Full U.S. prescribing information for FIRAZYR is available at www.FIRAZYR.com.For more information about HAE visit www.haea.org. Prescribing information maydiffer between countries. Please consult your local prescribing information. About ViroPharma ViroPharma Incorporated is an international biopharmaceutical company committedto developing and commercializing novel solutions for physician specialists toaddress unmet medical needs of patients living with diseases that have few ifany clinical therapeutic options. ViroPharma is developing a portfolio of therapeutics for rare and Orphandiseases 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 newstandards of care in the way serious diseases are treated, and to buildinternational partnerships with the patients, advocates, and health careprofessionals it serves. ViroPharma's commercial products address diseasesincluding hereditary angioedema (HAE), seizures in children and adolescents,adrenal insufficiency and C. difficile-associated diarrhea (CDAD). For fullU.S. prescribing information on ViroPharma's products, please download thepackage inserts at http://www.viropharma.com/Products.aspx; the prescribinginformation for other countries can be found at www.viropharma.com. ViroPharma routinely posts information, including press releases, which may beimportant to investors in the investor relations and media sections ofViroPharma's web site, www.viropharma.com. ViroPharma encourages investors toconsult 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 C1esterase inhibitor product. In the U.S., Cinryze is approved by the FDA forroutine prophylaxis against angioedema attacks in adolescent and adult patientswith HAE. In the E.U., the product is approved by the EMA for the treatmentand pre-procedure prevention of angioedema attacks in adults and adolescentswith HAE, and routine prevention of angioedema attacks in adults andadolescents with severe and recurrent attacks of HAE, who are intolerant to orinsufficiently protected by oral prevention treatments or patients who areinadequately managed with repeated acute treatment. Cinryze is for intravenoususe only. Severe hypersensitivity reactions to Cinryze may occur. Thrombotic events haveoccurred in patients receiving Cinryze, and in patients receiving off-labelhigh dose C1 inhibitor therapy. Monitor patients with known risk factors forthrombotic events. With any blood or plasma derived product, there may be arisk of transmission of infectious agents, e.g. viruses and, theoretically, theCJD agent. The risk has been reduced by screening donors for prior exposure tocertain virus infections and by manufacturing steps to reduce the risk of viraltransmission including pasteurization and nanofiltration. The most common adverse reactions in clinical trials associated with Cinryzewere rash, headache, nausea, erythema, phlebitis and local reactions at theinjection site. Adverse events of sinusitis and upper respiratory infectionalso were observed in clinical trials. No drug-related serious adverse eventswere 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 befound at www.viropharma.com. ADDITIONAL INFORMATION AND WHERE TO FIND IT This announcement is for informational purposes only and does not constitute anoffer to purchase or a solicitation of an offer to sell ViroPharma commonstock. The offer to buy ViroPharma common stock will only be made pursuant to atender offer statement (including the offer to purchase, letter of transmittaland other related tender offer materials). Investors and security holders areurged to read both the tender offer statement (which will be filed by ShirePharmaceutical Holdings Ireland Limited (SPHIL) and a subsidiary of SPHIL withthe 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 availablebecause they will contain important information, including the terms andconditions of the offer. Investors and security holders may obtain a free copyof these materials (when available) and other documents filed by SPHIL andViroPharma with the SEC at the website maintained by the SEC at www.sec.gov.The tender offer statement and related materials, and the solicitation/recommendation statement, may also be obtained (when available) for free bycontacting Shire Investor Relations, at the contact information listed below.ViroPharma also will provide a copy of these materials without charge on itswebsite at www.viropharma.com under the "Investors" section. Copies of these materials and any documentation relating to the tender offerare not being, and must not be, directly or indirectly, mailed or otherwiseforwarded, distributed or sent in, into or from any jurisdiction where to do sowould be unlawful. Footnotes 1. 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 areforward-looking statements. Forward-looking statements involve a number ofrisks and uncertainties and are subject to change at any time. In the eventsuch risks or uncertainties materialize, Shire's results could be materiallyadversely affected. The risks and uncertainties include, but are not limitedto, 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 ofreimbursement, by third-party payors in a timely manner for Shire's productsmay impact future revenues and earnings;  Shire relies on a single source for manufacture of certain of its productsand a disruption to the supply chain for those products may result in Shirebeing unable to continue marketing or developing a product or may result inShire being unable to do so on a commercially viable basis;  Shire uses third party manufacturers to manufacture many of its products andis reliant upon third party contractors for certain goods and services, and anyinability of these third party manufacturers to manufacture products, or anyfailure of these third party contractors to provide these goods and services,in each case in accordance with its respective contractual obligations, couldadversely affect Shire's ability to manage its manufacturing processes or tooperate its business;  the development, approval and manufacturing of Shire's products is subject toextensive oversight by various regulatory agencies and regulatory approvals orinterventions associated with changes to manufacturing sites, ingredients ormanufacturing processes could lead to significant delays, increase in operatingcosts, lost product sales, an interruption of research activities or the delayof new product launches;  the actions of certain customers could affect Shire 's ability to sell ormarket products profitably and fluctuations in buying or distribution patternsby such customers could adversely impact Shire's revenues, financial conditionsor results of operations;  investigations or enforcement action by regulatory authorities or lawenforcement agencies relating to Shire's activities in the highly regulatedmarkets in which it operates may result in the distraction of seniormanagement, significant legal costs and the payment of substantial compensationor fines;  Shire's proposed acquisition of ViroPharma may not be consummated due to theoccurrence of an event, change or other circumstances that gives rise to thetermination of the merger agreement;  a governmental or regulatory approval required for the proposed acquisitionof ViroPharma may not obtained, or may be obtained subject to conditions thatare not anticipated, or another condition to the closing of the proposedacquisition may not be satisfied;  ViroPharma may be unable to retain and hire key personnel and/or maintain itsrelationships with customers, suppliers and other business partners pending theconsummation of the proposed acquisition by Shire, or ViroPharma's business maybe disrupted by the proposed acquisition, including increased costs anddiversion of management time and resources;  difficulties in integrating ViroPharma into Shire may lead to the combinedcompany not being able to realize the expected operating efficiencies, costsavings, revenue enhancements, synergies or other benefits at the timeanticipated or at all; and other risks and uncertainties detailed from time to time in Shire's orViroPharma'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 containinformation that includes or is based on "forward-looking statements". Thesestatements include statements regarding planned completion of the offer and themerger. We have tried, whenever possible, to identify such statements by wordssuch as "believes," "expects," "anticipates," "intends," "estimates," "plan,""projected," "forecast," "will," "may" or similar expressions. Because thesestatements reflect our current views concerning future events and are based ona number of assumptions that could ultimately prove inaccurate, theseforward-looking statements are subject to risks and uncertainties including,but not limited to: all elements of our financial guidance for 2013, ourability to continue to successfully commercialize our products in the UnitedStates and Europe, the timing and results of anticipated events in our clinicaldevelopment programs, and our ability to identify and execute upon businessdevelopment 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 thanthose required for most chemical pharmaceuticals, and as a result, Sanquin, ourmanufacturer of Cinryze has received observations on Form 483 and a warningletter which require us to continue to meet commitments made to the FDA relatedto various manufacturing issues. In the event Sanquin fails to meet thesecommitments, the FDA may take actions that limit our ability to manufactureCinryze. In the event Sanquin is not able to manufacture the anticipated volumeof product at the industrial scale as a result of either FDA requirements,batch failures, variability in batch yields, required maintenance or othercauses, we may not be able to satisfy patient demand or build safety stock. Ourinability to obtain adequate product supplies to satisfy our patient demand maycreate opportunities for our competitors and we will suffer a loss of potentialfuture revenues. Forward looking statements related to the transaction include: the timing ofthe filings and approvals relating to the transaction and the expected timingof the completion of the transaction; uncertainties as to the percentage of theViroPharma's stockholders tendering their shares in the offer; the possibilitythat competing offers will be made; the possibility that various closingconditions for the transaction may not be satisfied or waived, including that agovernmental entity may prohibit, delay or refuse to grant approval for theconsummation of the transaction or may approve the transaction with certainburdensome conditions that may result in a termination of the Merger Agreement;the effects of disruption caused by the transaction making it more difficult tomaintain relationships with employees, collaborators, vendors and otherbusiness partners; the risk that stockholder litigation in connection with thetransaction may result in significant costs of defense, indemnification andliability; and other risks and uncertainties discussed in the ViroPharma'sfilings with the SEC, including the "Risk Factors" sections of the ViroPharma'smost recent annual report on Form 10-K and subsequent quarterly reports on Form10-Q, as well as the tender offer documents to be filed by SPHIL and asubsidiary of SPHIL, and the Solicitation/Recommendation Statement to be filedby ViroPharma. These risks, uncertainties and other factors, individually orin the aggregate, could cause actual results and events to differ materiallyfrom those referred to in the forward-looking statements. All forward-lookingstatements are based on information currently available to ViroPharma, andViroPharma assumes no obligation to update any such forward-lookingstatements. Registered in Jersey, No. 99854, 22 Grenville Street, St Helier, Jersey JE4 8PX Press Release www.shire.com