Shire's best-selling drug is Vyvanse, used to treat attention deficit hyperactivity disorder, but some other products are for rare diseases. Those have fewer patients but higher profits per patient because of Food and Drug Administration rules designed to encourage companies to produce such medicines.
ViroPharma got 77 percent of its $428 million in revenue in 2012 from Cinryze, which is used to avoid attacks of hereditary angioedema (HAE). The condition, which involves swelling of the skin, limbs, or chest, can be fatal when the swelling constricts an airway. Shire makes a complementary drug, Firazyr, used to treat acute attacks of HAE.
Bernstein Research analyst Ronny Gal, who follows Shire, wrote in a note to clients that Shire's strategic rationale for the deal made sense, assuming it gets the $150 million in annual cost savings.
"At a first glance, this looks like a decent but unspectacular deal," Gal wrote, adding he suspected Shire might find more cost savings and make other acquisitions.
"This is a huge win for ViroPharma shareholders," said Akiva Felt, who covers ViroPharma for Oppenheimer & Co.
Even for those having to take cash - and pay taxes - for their ViroPharma stock?
"Yes," Felt said. "The current market would never give ViroPharma the credit that Shire would for Cinryze. Shire has an existing European infrastructure that can create value for Cinryze."
ViroPharma began operations in 1994, and by the end of 2012 had 410 employees worldwide, 265 in the United States.
"After thoroughly evaluating our strategic options, we determined that this transaction is in the best interests of ViroPharma, our shareholders, and our patients," chief executive officer Vincent Milano said in a statement.
Flemming Ornskov became Shire CEO in early 2013 and has been reorganizing the company. Though Shire added jobs in places, it also laid off workers. Ornskov canceled plans for a new U.S. headquarters in Malvern and more recently announced research job cuts at the company's original home in Basingstoke, England.
"The acquisition of ViroPharma will immediately benefit Shire," Ornskov said in a statement, "and is entirely consistent with our clear strategic objective of strengthening our rare disease portfolio."