Shire is heading higher despite recent reports the pharmaceutical group could be interested in a near $3bn US deal.
ViroPharma, which specialises in drugs to treat rare diseases, was said to be in the sights of a couple of suitors, including Shire and Sanofi, according to Bloomberg.
Shire shares are currently 55p higher at £25.32, and analysts at Deutsche Bank were positive about any potential move on ViroPharma by the company:
Whether or not Shire has actually approached ViroPharma is unknown at this point. However, a combination of the two companies makes both strategic and financial sense, in our view.
First, ViroPharma's rare disease focus with a fast-growing flagship prophylaxis hereditary angioedema (HAE) product Cinryze (annualized sales approaching $400m) would be highly complementary to Shire's acute-HAE drug Firazyr (estimated 2013 US sales of $196m).
Second, given nearly a complete overlap in sales and marketing, we would expect very significant cost synergies.
Third, it would help mitigate a potential "revenue gap" in 2015 due to Intuniv generics entering the market in late 2014.
And fourth, given a more efficient tax structure, Shire (current 18%-20% tax rate) potentially could further extract enhanced profitability as ViroPharma has a tax rate of nearly 40% given that it is a US domiciled company.
Elsewhere GlaxoSmithKline has climbed 6p to £16.28 after a combination treatment of Tafinlar and Mekinist for melanoma won a priority review from US regulators, who will decide on whether to give approval by early January.
