By Lisa Kerner
Charlotte, N.C., July 15 - ViroPharma Inc. agreed to acquire Lev Pharmaceuticals, Inc. in a stock and cash transaction with an initial value of $442.9 million, or $2.75 per Lev share.
According to ViroPharma, the per-share offer price will be comprised of $2.25 per share in cash and $0.50 per share in ViroPharma common stock, subject to a collar.
The upfront consideration value could be lower or higher if the ViroPharma average common share price is lower than $10.03 or higher than $15.68 per share during the 20-trading-day period prior to closing, a ViroPharma news release stated.
Lev shareholders will receive the non-transferable contractual right to two contingent payments (CVR payments) of $0.50 each that could deliver up to an additional $174.6 million, or $1.00 per share in cash, if the company meets certain targets related to Lev's orphan drug Cinryze.
Cinryze (C1 inhibitor (human)) is currently under regulatory review for approval by the U.S. Food and Drug Administration as a replacement therapy for patients with hereditary angioedema, a genetic deficiency.
The upfront consideration of $2.75 per share and the potential for a total value of $3.75 per share represent premiums of 49% and 103%, respectively, over Lev's closing stock price on July 14, ViroPharma noted.
The potential net total value of the deal is $617.5 million.
Both companies' boards of directors have unanimously approved the merger agreement.
According to ViroPharma, the transaction is expected to close by the end of 2008.
ViroPharma, an Exton, Pa., biopharmaceutical company, purchased $20 million of Lev common stock concurrently with the execution of the merger agreement.
"This transaction is consistent with ViroPharma's stated objective of broadening our portfolio of therapies for serious life-threatening conditions in selected specialty markets," ViroPharma president and chief executive officer Vincent Milano said in the release.
"We believe this transaction recognizes the value we have created at Lev and provides our shareholders with attractive financial terms, through the upfront payment and the opportunity to continue to share in the success of Cinryze through the ownership of ViroPharma shares and the contingent value rights," Lev chairman of the board Judson Cooper said in the release.
"Leveraging the combined resources of both companies not only strengthens our C1 inhibitor development platform, but also underscores our commitment to serving patients with critical unmet medical needs," Cooper added.
J.P. Morgan Securities Inc. advised ViroPharma, while Piper Jaffray & Co. provided a fairness opinion to ViroPharma's board of directors.
Lev was advised by J.P. Morgan Securities, as successor to Bear, Stearns & Co. Inc., which also provided a fairness opinion to Lev's board of directors.
Lev is a New York development-stage biopharmaceutical company.
| Acquirer: | ViroPharma Inc.
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| Target: | Lev Pharmaceuticals, Inc.
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| Announcement date: | July 15
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| Transaction total: | $442.9 million
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| Price per share: | $2.75
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| Expected closing: | End of 2008
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| Stock price of acquirer: | Nasdaq: VPHM: $12.54 on July 14
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| Stock price of target: | OTCBB: LEVP.OB: $1.85 on July 14
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