Shire’s £2.6bn buy to boost portfolio

Several companies including France’s Sanofi, according to reports, were interested in ViroPharma, which makes Cinryze for the treatment of immune disorder hereditary angioedema.

Treatments for such rare disorders can command huge prices, running into hundreds of thousands of dollars a year per patient.

Shire, which latched on to the rare disease drugs trend years before bigger rivals, said yesterday it had agreed to pay $50 a share in cash for ViroPharma, a 27 per cent premium on Friday’s closing price. Shares in the US biopharmaceutical spiked nearly 30 per cent in September on bid speculation.

Analysts at Morgan Stanley said that for Shire the deal “cements strategy”, and it could bolster earnings per share by 5-10 per cent in 2014-2016.

Though some investors have raised concerns about the sustainability of the business model for rare disease drugs, healthcare providers have so far generally accepted the high costs, given the transforming effects of the medicines and the very small number of patients who need them.

The value of biological drugs to treat rare disease was crystallised in 2011 when Sanofi paid more than $20bn to buy Genzyme.

Rare diseases are already a central plank of Shire’s strategy, and acquisitions have helped it build up a portfolio of drugs.