Washington Editor

Antibiotic maker ViroPharma Inc. is acquiring Lev Pharmaceuticals Inc. for $442.9 million up front, or $2.75 per share. The deal has a potential net aggregate value of up to $617.5 million if certain milestones are met.

News of the acquisition sent shares of New York-based Lev (OTC BB:LEVP) soaring 28.7 percent, while Exton, Pa.-based ViroPharma's (NASDAQ:VPHM) stock tumbled 15.3 percent.

Lev's shares closed at $2.38, a gain of 53 cents, while ViroPharma's shares closed at $10.62, down $1.92.

Under the deal, ViroPharma gains Cinryze (C1-esterase inhibitor), which currently is under review by the FDA as a replacement therapy for patients with hereditary angioedema (HAE), a rare, potentially life-threatening genetic disorder caused by a deficiency of C1 inhibitor, a human plasma protein.

The agency is expected to act on Cinryze's biologics license application (BLA) by Oct. 14.

The product, a highly purified, nanofiltered, lyophilized concentrate of C1 inhibitor, has been granted orphan drug designation by the FDA, which would provide Cinryze with seven years of exclusivity if approved, said ViroPharma CEO Vincent Milano.

He noted during a conference call to investors and analysts Tuesday that an FDA advisory panel in a unanimous vote in May said that there was sufficient evidence of safety and efficacy to approve Cinryze as a prophylactic therapy for HAE. (See BioWorld Today, May 5, 2008.)

However, Milano said, the panel reviewed the drug as a prophylactic treatment only.

The FDA has indicated that it considers prophylaxis and acute to be different orphan indications, said Colin Broom, ViroPharma's chief scientific officer.

"There could be additional requirements for an acute indication to be approved," Milano said.

Lev had expected an FDA decision on its BLA by Jan. 8 under a priority review. However, the agency instead issued a complete response letter later that month seeking more information about chemistry, manufacturing and controls processes and additional analyses of efficacy data for Cinryze. Lev submitted a response to the agency in mid-April.

"We evaluated the information in Lev's response and are comfortable with their response," Milano declared. But, he added, "The FDA still has to agree."

While the application for Cinryze is for HAE, Milano said, "C1 depletion is also implicated in a number of other serious inflammatory disorders," which could lead to future indications sought for the product.

But in the near term, he asserted, there is a "high probability of success" for approval of Cinryze as a prophylactic therapy for HAE.

Of the investigational drugs in development for HAE, only Cinryze has pivotal prophylactic data, Dan Soland, ViroPharma's chief operating officer, maintained.

Other firms developing drugs to treat HAE include Cambridge, Mass.-based Dyax Corp., King of Prussia, Pa.-based CSL Behring, Berlin-based Jerini AG and Pharming Group NV, of Leiden, the Netherlands, Soland noted.

Jerini early Tuesday said that the European Commission had granted marketing authorization for Firazyr (icatibant) to treat acute attacks of HAE in all 27 EU countries. However, the FDA in April said that the drug, a synthetic peptidomimetic that works by blocking the B2 receptor as an antagonist to the peptide-hormone bradykinin, which has been shown to be elevated in HAE patients and responsible for edema formation during HAE attacks, was not approvable in the U.S. (See BioWorld Today, April 25, 2008.)

Jerini's drug also has orphan drug designation in the EU and the U.S.

Analyst Katherine Xu, of Credit Suisse Securities LLC, said that Dyax's drug, DX-88, is not a direct competitor to Cinryze in HAE. "We believe the products can co-exist in the market, and Cinryze may command a special niche in the prophylactic setting, while DX-88 [resides] in the acute setting," she said in a research note.

DX-88 selectively targets kallikrein, which is a different mechanism of action than that of Cinryze. Dyax's drug is on tract to gain expedited approval in the U.S. by the end of the year, according to the firm.

Currently there is no FDA-approved treatment for HAE, which affects up to 10,000 people in the U.S.

An approval of Cinryze would mean patients with HAE finally would have access to a C1 inhibitor in the U.S., Milano said, noting that patients with HAE in Europe have had access to such products for more than 35 years.

A Cinryze approval, he added, will also "drive additional near-term value, revenues and cash flows for ViroPharma."

The firm's primary focus going forward, Milano said, will be on launching the product.

Lev's acquisition "represents an ideal strategic fit for our company and its shareholders," he said, adding that the deal provides ViroPharma with a "niche product opportunity."

Currently, ViroPharma's only marketed product is Vancocin (vancomycin hydrochloride capsules), which is the only antibiotic approved to treat enterocolitis caused by Staphylococcus aureus and antibiotic-associated pseudomembranous colitis caused by Clostridium difficile.

The firm's pipeline includes Camvia (maribavir), an antiviral compound in Phase III clinical development for prevention of cytomegalovirus disease in stem cell and solid organ transplant patients. The infection is the most common cause of viral illness-related death in transplant patients.