ViroPharma completes DuoCort acquisition

EXTON, Pa.—ViroPharma Incorporated has announced thecompletion of its acquisition of Helsingborg, Sweden-based DuoCort Pharma AB, aprivate company specializing in improving glucocorticoid replacement therapy.ViroPharma paid an upfront closing cost of 220 million Swedish kroner ($33.6million), and there are additional contingent milestone payments of up to 860million Swedish kroner (approximately $131 million) associated withmanufacturing, sales thresholds and territory expansion. Of that sum, 160 millionSwedish kroner (approximately $25 million) relate to specific regulatorymilestones, and 0 to 700 million Swedish kroner ($0 to approximately $107million) relate to commercial milestones based on the success of the product.

The acquisition will aid ViroPharma in the expansion of itsorphan disease commercial product pipeline. ViroPharma's pipeline currentlyconsists of products for the treatment of hereditary angioedema, Clostridiumdifficile and seizures in children andadolescents, with investigational products for indications such as hereditaryangioedema, recurrent C. difficileand organ transplantation issues such as antibody-mediated rejection anddelayed graft function.

DuoCort's product, Plenadren (hydrocortisone, modifiedrelease tablet), is an orphan drug indicated for the treatment of adrenalinsufficiency in adults. The product represents the first pharmaceuticalinnovation for the treatment population in more than 50 years, and as of 2006,it was estimated that 125,000 patients in the European Union (EU) suffer fromchronic adrenal insufficiency. Plenadren received an Orphan Medicinal ProductDesignation from the EU in May 2006 and received European MarketingAuthorization from the European Commission on Nov. 3.

"We are excited by the approval of Plenadren in Europeand confirmation of its Orphan Drug Designation by the EC, which gives thisproduct 10 years of market exclusivity at launch," Vincent Milano,ViroPharma's president and chief executive officer, said in a press release. "Ourattention has now turned to preparing for a robust European launch in late2012. Plenadren will be an important drug for patients with Addison's diseaseand other chronic adrenal insufficiencies, and we are committed to the launchand to ensuring that patients throughout Europe suffering from this lifethreatening disease have access to this important drug."

Patients suffering from adrenal insufficiency requireexogenous glucocorticoid replacement therapy, and while standard formulationsof hydrocortisone require multiple daily doses, Plenadren is a once-dailytreatment with a dual release profile that more closely mimics the naturalsecretion pattern of cortisol in the human body. Adrenal insufficiency (AI)results from insufficient cortisol production by the adrenal glands, and isassociated with several potentially severe morbidities including weight loss,muscle weakness, kidney failure, low blood pressure, gastrointestinal distress,depression and severe fatigue. Additionally, adrenal crisis can develop, whichin turn can be fatal if not properly treated.

Glucocorticoid hormone replacement therapy has beenavailable for years, but several complications and comorbidities have beennoted as a result, including poor metabolic profile, premature mortality, reducedbone mineral density, impaired well being and quality of life and a highfrequency hospitalizations/infections.

ViroPharma expects a commercial launch of Plenadren in theEU in approximately a year, and peak year sales are expected to reach up to $50million.

ViroPharma brought BMO Capital Markets on as its exclusivefinancial advisor for this transaction.