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From: IRWIN JAMES FRANKEL6/4/2008 1:14:58 PM
   of 62
 
Lev Pharmaceuticals Signs Agreements with CuraScript, CVS Caremark, and FFF Enterprises to Support Cinryze(TM) Commercialization
Wednesday June 4, 12:48 pm ET
Company Also Announces Plans for LevCare(TM) Program Providing Support Services to Hereditary Angioedema Patients and Their Physicians

NEW YORK--(BUSINESS WIRE)--Lev Pharmaceuticals, Inc. ("Lev" or the "Company") (OTCBB:LEVP - News) announced today that it has entered into multi-year agreements with CuraScript, CVS Caremark, and FFF Enterprises to serve as its specialty pharmacy, specialty distribution and patient services partners to support the U.S. commercialization of Cinryze™ [C1 inhibitor, (human)], the company’s investigational treatment for hereditary angioedema (HAE), also known as C1 inhibitor deficiency.

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Lev also announced plans to launch LevCare™, a program designed to ensure that patients have ready access to Cinryze™ once it becomes commercially available in the U.S. HAE is a rare, severely debilitating, life-threatening genetic disorder caused by a deficiency of C1 inhibitor, a human plasma protein. On May 2, 2008, U.S. Food and Drug Administration’s (FDA) Blood Products Advisory Committee voted unanimously that there is sufficient evidence of safety and efficacy to support the approval of Cinryze™ for the prophylactic treatment of HAE. Cinryze™ is currently under review by the FDA.

“By employing a ‘limited distribution model’ through the comprehensive, coordinated and integrated services of CuraScript, CVS Caremark, FFF Enterprises and LevCare™, we will be well positioned to provide patients with broad access to Cinryze™ pending FDA approval,” said Judson Cooper, Lev’s chairman. “We believe this proven specialty pharmaceutical model will facilitate favorable reimbursement coverage for and rapid uptake of Cinryze™ upon commercialization.”

CuraScript and CVS Caremark will provide specialty pharmacy and specialty distribution services that deliver Cinryze™ directly to patients, clinics and physicians. FFF Enterprises will serve as Lev’s 3PL (Third Party Logistics) provider and specialty distributor to supply Cinryze™ to hospitals, clinics and physicians. LevCare™, which will be administered by TheraCom, a division of CVS Caremark, will provide support services to patients and physicians, such as benefit coverage investigations, prior authorizations, case management and broad-based reimbursement assistance.

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From: DewDiligence_on_SI7/3/2008 5:04:52 AM
   of 62
 
Shire Acquires Jerini for $518M in Another High-Premium Deal:

investorshub.advfn.com

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To: DewDiligence_on_SI who wrote (41)7/3/2008 7:18:53 AM
From: rkrw
   of 62
 
Deal does make strategic sense for Shire, makes their existing sales force more profitable. Will be interesting to see how levp and dyax respond.

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From: idos7/15/2008 9:18:44 AM
   of 62
 
ViroPharma will acquire Lev, a biopharmaceutical company focused on developing and commercializing therapeutic products for the treatment of inflammatory diseases, for $442.9 million of upfront consideration, or $2.75 per Lev share, comprised of $2.25 per share in cash and $0.50 per share in ViroPharma common stock (subject to a collar). Contingent consideration of up to $1.00 per share may be paid on achievement of certain regulatory and commercial milestones. The transaction with a potential net aggregate value of up to $617.5 million has been unanimously approved by the boards of directors of both companies. The companies expect the transaction to be completed by the end of 2008. In addition, concurrently with the execution of the merger agreement, ViroPharma purchased $20 million of Lev common stock.

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To: idos who wrote (43)7/15/2008 9:26:32 AM
From: IRWIN JAMES FRANKEL
   of 62
 
ViroPharma To Acquire Lev Pharmaceuticals
Tuesday July 15, 9:05 am ET
- Acquisition Adds Late Stage Product Targeting Life-threatening Hereditary Angioedema Disease with Limited Treatment Options -
- Company to Host Conference Call at 10:30 A.M. Eastern Today to Discuss Transaction -

EXTON, Pa., July 15 /PRNewswire-FirstCall/ -- ViroPharma Incorporated (Nasdaq: VPHM - News) and Lev Pharmaceuticals, Inc. (OTC Bulletin Board: LEVP - News) today announced that the companies have signed a definitive merger agreement under which ViroPharma will acquire Lev, a biopharmaceutical company focused on developing and commercializing therapeutic products for the treatment of inflammatory diseases, for $442.9 million of upfront consideration, or $2.75 per Lev share, comprised of $2.25 per share in cash and $0.50 per share in ViroPharma common stock (subject to a collar). Contingent consideration of up to $1.00 per share may be paid on achievement of certain regulatory and commercial milestones. The transaction with a potential net aggregate value of up to $617.5 million has been unanimously approved by the boards of directors of both companies. The companies expect the transaction to be completed by the end of 2008. In addition, concurrently with the execution of the merger agreement, ViroPharma purchased $20 million of Lev common stock.

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The acquisition of Lev Pharmaceuticals further enhances ViroPharma's pipeline with Cinryze(TM) (C1 inhibitor (human)), which is currently under regulatory review for approval by the U.S. Food and Drug Administration as a replacement therapy for patients with hereditary angioedema (HAE), also known as C1 esterase inhibitor (C1-INH) deficiency. The use of replacement therapy in patients with C1-INH deficiency is supported by more than 35 years of clinical practice experience in Europe. C1-INH depletion is also implicated in a number of other serious inflammatory disorders.

Hereditary angioedema, or C1-INH deficiency, is a dangerous and potentially deadly inflammatory disease affecting up to 10,000 patients in the United States, caused by a genetic deficiency in an essential protein called C1 esterase inhibitor. Clinical studies have shown that prophylactic C1 inhibitor replacement therapy with Cinryze can significantly reduce the severity, duration and frequency of HAE attacks.

"This transaction is consistent with ViroPharma's stated objective of broadening our portfolio of therapies for serious life-threatening conditions in selected specialty markets," commented Vincent Milano, ViroPharma's president and chief executive officer. "Lev's orphan drug Cinryze(TM) is a life-saving therapy treating a very dangerous disease. This opportunity provides a clear strategic fit with ViroPharma: Cinryze targets a market that is addressable with modest additional infrastructure and further serves patients suffering from a disease with few treatment options. We are very pleased to add the expertise of Lev to our organization, and Cinryze to our growing portfolio of options for underserved patient populations with critical and urgent needs."

"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(TM) through the ownership of ViroPharma shares and the contingent value rights," commented Judson Cooper, Lev's chairman of the board. "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."

Transaction Terms

Under the terms of the merger agreement, ViroPharma will acquire the outstanding common stock of Lev for $2.25 per share in cash and $0.50 per share in stock ("Upfront Consideration"), 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 twenty trading day period prior to closing. In addition, Lev shareholders will receive the non-transferrable 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. The first CVR payment of $0.50 per share would become payable when either (i) Cinryze is approved by the FDA for acute treatment of HAE and the FDA grants orphan exclusivity for Cinryze encompassing the acute treatment of HAE to the exclusion of all other human C1 inhibitor products or, (ii) orphan exclusivity for the acute treatment of HAE has not become effective for any third party's human C1 inhibitor product for two years from the later of the date of closing and the date that orphan exclusivity for Cinryze for the prophylaxis of HAE becomes effective. The second CVR payment of $0.50 per share would become payable when Cinryze reaches at least $600 million in cumulative net product sales within 10 years of closing. 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, 2008.

Closing is subject to certain conditions including approval under the Hart-Scott-Rodino Act, the approval of Lev's shareholders and other customary closing conditions. Mr. Judson Cooper, Lev's chairman of the board, and Dr. Joshua Schein, Lev's chief executive officer, respectively, and their affiliates, who collectively hold an aggregate of approximately 23% of the outstanding Lev shares, have agreed to vote their shares in favor of the transaction.

Additionally, ViroPharma agreed to make a $20 million investment in Lev, at signing, by purchasing 9,661,836 shares of Lev common stock at a 10 percent premium to the five day average closing price of Lev's shares for the period ending Friday, July 11, 2008, sold pursuant to Lev's effective registration statement on Form S-3.

J.P. Morgan Securities Inc. advised ViroPharma and DLA Piper acted as legal counsel. In addition, Piper Jaffray & Co. provided a fairness opinion to ViroPharma's board of directors. J.P. Morgan Securities Inc., as successor to Bear, Stearns & Co. Inc., advised Lev and provided a fairness opinion to Lev's board of directors. Willkie Farr & Gallagher LLP and Becker & Poliakoff, LLP acted as legal counsel to Lev.

Conference Call and Webcast Information

ViroPharma will host a live teleconference and webcast (featuring slide presentation) with senior management to discuss the strategic acquisition of Lev Pharmaceuticals on Tuesday, July 15, 2008 at 10:30 a.m. ET. Members of Lev Pharmaceuticals senior management will be available during the question and answer period. To participate in the conference call, please dial 888-299-4099 (domestic) and 302-709-8337 (international). After placing the call, please tell the operator you wish to join the ViroPharma investor conference call.

Alternatively, the live webcast of the conference call and slide presentation can be accessed via ViroPharma's website at viropharma.com. Windows Media or Real Player will be needed to access the webcast. An audio archive will be available at the same address until August 1, 2008.

Cinryze(TM) Regulatory Status

On May 2, 2008, the Blood Products Advisory Committee (BPAC) to the U.S. Food and Drug Administration (FDA) voted unanimously that there is sufficient evidence of the safety and efficacy for the approval of Cinryze for the prophylactic treatment of HAE. The data from Lev's acute treatment trial was not presented before the BPAC and is currently under active review at FDA. On May 6, 2008, Lev announced that FDA accepted for review Lev's complete response submission for Cinryze targeting an action date of October 14, 2008.

About Hereditary Angioedema

HAE is the result of a defect in the gene controlling the synthesis of C1 inhibitor. C1 inhibitor maintains the natural regulation of the contact, complement, and fibrinolytic systems, that when left unrestricted, can initiate or perpetuate an attack by consuming the already low levels of endogenous C1 inhibitor in HAE patients. Patients with C1 inhibitor deficiency experience recurrent, unpredictable, debilitating, and potentially life threatening attacks of inflammation affecting the larynx, abdomen, face, extremities and urogenital tract. While there is no approved therapy for acute HAE attacks in the U.S., a commercially available C1 inhibitor has been used in Europe to treat HAE for more than 35 years. There are estimated to be 10,000 people with HAE in the U.S.

Additional information on HAE can be obtained from the U.S. Hereditary Angioedema Association at www.haea.org.

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From: IRWIN JAMES FRANKEL7/24/2008 8:12:42 AM
   of 62
 
HAE: Biotech's Latest Orphan-Drug Race

Elizabeth Trotta
07/17/08 - 12:07 PM EDT

A rare genetic disorder known as hereditary angiodema (HAE) is attracting a great deal of attention from drugmakers these days.

On Tuesday, ViroPharma VPHM said it will spend a minimum of $443 million to buy Lev Pharmaceuticals LEVP, which is currently in a tight race to get the first HAE drug approved in the U.S.

The deal comes a week after U.K. specialty drugmaker Shire SHPGY announced its deal to acquire Germany's Jerini for roughly $520 million. Jerini received European approval for an HAE drug Tuesday; Shire is expected to pursue a U.S. approval as well.

ViroPharma and Shire join fellow drugmakers Dyax DYAX and CSL Behring in seeking regulatory approval for new HAE treatments, a disease that affects 10,000 patients in the EU region and 7,000 patients in North America, according to Shire.

Small numbers of patients can still lead to big profits, especially when drugs for rare genetic diseases can carry price tags in the hundreds of thousands of dollars per year, as companies like Genzyme GENZ and Alexion Pharmaceuticals ALXN have already proven.

A Race for the U.S. Market, and Exclusivity

HAE is a disorder caused by a defect in the gene C1-INH, which causes periodic, acute episodes of painful swelling in a patient's extremities, gastrointestinal tract and, most dangerously, the airway passages. It's estimated that about 30% of HAE patients die due to suffocation caused when their airway swells shut.

While treatments for HAE have been marketed in Europe for more than 30 years, the U.S. remains an untapped commercial opportunity.

Lev Pharmaceuticals and Behring both have upcoming U.S. regulatory approval decisions on their respective products, Cinryze and Berinert P. Both treatments are administered intravenously and are essentially identical.

This sets up an interesting race to approval because the small number of U.S. patients afflicted with HAE affords orphan-drug status and with it seven years of market exclusivity in the U.S. to the first drug approved to treat the disease.

Lev (now to be ViroPharma) sought Food and Drug Administration approval for Cinryze first, but the agency issued an approvable letter on Jan. 30, requesting more information. On May 2, an FDA advisory panel recommended approval of Cinryze to prevent HAE attacks. Lev responded to the FDA's information request and is now expecting to hear on Cinryze's approval on or before Oct. 14.

Behring is seeking approval for Berinert P as a treatment for acute HAE attacks -- not as a prophylactic, or preventive treatment for the disease. The FDA is expected to make its decision on or before Sept. 6, provided that it receives a priority review.

Susquehanna Financial Group biotech analyst Jason Kolbert, who follows the HAE companies closely, says the FDA may sidestep the hard decision of granting market exclusivity to either Cinryze or Berinert by approving both drugs for slightly different indications.

Cinryze could be approved for the prophylactic treatment of HAE while Berinert could be approved for patients undergoing acute HAE attacks, he says.

An HAE drug approved in the preventive setting means substantially more revenue per patient -- $250,000 to $350,000 a year -- compared to an acute treatment drug, which may cost about $25,000 a year per patient, says Kolbert.

This helps explain why ViroPharma agreed to pay $443 million, and possibly even more, to acquire Lev and gain access to Cinryze.

High-Risk Competition

Not everyone is happy with ViroPharma's decision. The stock is off about 15%, dipping below $11 a share, in the wake of Tuesday's announcement, in part because some investors worry the company paid too much for a drug that may never generate sufficient returns.

"With so much intense competition expected in the HAE space ahead, we wonder if prophylactic therapy will be supported by payors, especially if good acute therapies are available," notes Kolbert. "The glaring price difference would suggest to us that only the most severe patients will qualify for prophylactic treatment."

Kolbert covers both ViroPharma and Dyax, and he has neutral ratings for both stocks.

The second round of HAE entrants to the U.S. market include Dyax and now, feasibly, Shire, which last week announced it was buying Jerini and its lead product HAE drug Firazyr in a deal valued at $521 million.

Both companies are developing HAE drugs that can be given to patients with a simple injection under the skin, instead of intravenously, which may make them more convenient and stronger competitors when launched.

Dyax is expected to file its drug, DX-88, for FDA approval at the end of the year, pending results from an ongoing phase III study that should be completed in the current quarter.

Shire's Firazyr was rejected by the FDA in April, and Wall Street is speculating that approval in the U.S. will require another clinical trial. Jerini didn't have those resources, but with Shire's support it's now feasible and likely.

Drugs to treat HAE are well-established in Europe. Behring's Berinert is already approved there and sold in several countries. Shire's Firazyr was approved for European use Tuesday. Analysts expect the drug could reach global peak sales of $350 million to $400 million.

ViroPharma and Dyax are also expected to seek European approval for Cinryze and DX-88, respectively.

With both Jerini and Lev each fetching premium takeout prices, investor attention may shift to Dyax. The stock, closing at $3.71 on Wednesday, is up well over 20% since the beginning of July.

"We believe Dyax shares are undervalued for a late-stage company, noting an estimated technology value of only approximately $140 million and the recent Jerini purchase by Shire for over $500 million and ViroPharma proposed acquisition of Lev Pharmaceuticals for over $400 million," wrote Needham biotech analyst Mark Monane in a note Tuesday. He has a buy rating and an $8 price target on Dyax.

But in this competitive environment for new HAE drugs, the pressure is mounting. "It becomes critical that Dyax not make any further missteps in its delayed efforts to get DX-88 to the U.S. marketplace," Susquehanna's Kolbert says.

And when it comes to competition, of course, more may mean less. "You are going to have four or five companies competing in this niche orphan space, and I'm concerned that that it's going to be not-so-profitable for any one company," he adds.

thestreet.com

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From: IRWIN JAMES FRANKEL7/30/2008 9:14:41 AM
   of 62
 
ViroPharma Incorporated Reports Second Quarter 2008 Financial Results
Wednesday July 30, 7:46 am ET
- Company Achieves Record Vancocin(R) Net Sales; Increases Full Year Guidance for 2008 -

EXTON, Pa., July 30 /PRNewswire-FirstCall/ -- ViroPharma Incorporated (Nasdaq: VPHM - News) reported today its financial results for the second quarter and six-months ended June 30, 2008.

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Key events since March 31, 2008 include:

Development:

-- Completed enrollment in Phase 3 study of maribavir in stem cell transplant (SCT) patients;

-- Announced intent to present top-line maribavir Phase 3 SCT data in the first quarter of 2009;

-- Announced intent to file the initial New Drug Application (NDA) in the U.S., Marketing Authorization Application (MAA) in Europe, and New Drug Submission (NDS) in Canada for maribavir in SCT patients in the third quarter of 2009;

-- Complete clinical trial results from maribavir Phase 2 study in stem cell transplant patients were published in the June 1 issue of the scientific journal Blood; and

-- Patient enrollment continued in Phase 3 study of maribavir in solid organ (liver) transplant patients.

Operational:

-- Net sales of Vancocin achieved a record $65 million;

-- Research and development expenses increased by 106 percent over the second quarter of 2007, primarily driven by investments in maribavir and NTCD; and

-- Selling, general and administrative expenses increased 94 percent over the second quarter of 2007 due to increased investments in our European operations, our Vancocin sales force, additional medical education activities and increased marketing efforts.

Business Development:

-- Signed a definitive merger agreement under which ViroPharma will acquire Lev Pharmaceuticals, Inc. (OTC Bulletin Board: LEVP - News) for $442.9 million of upfront consideration, or $2.75 per Lev share, comprised of $2.25 per share in cash and $0.50 per share in ViroPharma common stock (subject to collar);

-- Contingent consideration of up to $1.00 per share may be paid on achievement of certain regulatory and commercial milestones; and

-- Transaction is expected to be completed by the end of 2008.


Financial Results:
-- Operating income was $30 million;
-- Increased working capital by $25 million to $644 million;

-- Cash, cash equivalents and short-term investments grew by $34 million to $633 million; and

-- 14th consecutive quarter of positive cash flow and profitability achieved.

Net sales of Vancocin were $65.4 million for the second quarter of 2008 and $116.4 million for the first six months of 2008, as compared to $56.1 million and $105.1 million in the respective 2007 periods.

Operating income in the second quarter and six-months ended June 30, 2008 was $29.7 million and $49.2 million, respectively, compared to $35.9 million and $68.8 million in the second quarter and six months of 2007, respectively. Operating income decreased primarily due to higher R&D and SG&A costs partially offset by higher net sales.

"The second quarter of 2008 was a period of considerable achievement throughout the company," commented Vincent Milano, ViroPharma's president and chief executive officer. "The growing momentum surrounding maribavir was evident as we completed enrollment of our phase 3 study in stem cell transplant patients, solidified our global regulatory filing strategy and continued to finalize our pre-launch, approval and launch plans. We also continue to make noteworthy progress enrolling patients in the solid organ transplant study. In addition, we saw remarkable performance of Vancocin, generating record quarterly revenue during the second quarter and allowing us to increase our 2008 net sales guidance to between $220 and $240 million. Our sales force, which launched earlier in the year, is making good progress in accessing the physician community and we anticipate that the progress will continue throughout the year."

Continued Milano, "We believe that the second half of 2008 will be marked by additional momentum throughout the business as we continue to execute on the maribavir studies and progress towards our planned initial NDA, MAA, and NDS filings in the third quarter of 2009. Regarding our C. difficile franchise, we look forward to the publication of the final IDSA/SHEA treatment guidelines later this year for the management of C. difficile infection as these guidelines represent an important step in ensuring that the most severely affected patients are receiving Vancocin, the appropriate therapy for these patients."

Net income in the second quarter and six-months ended June 30, 2008 was $24.1 million and $41.5 million, respectively, compared to a net income of $31.6 million and $53.7 million for the same periods in 2007. Net income per share for the quarter ended June 30, 2008 was $0.34 per share, basic and $0.30 per share, diluted, compared to a net income of $0.45 per share, basic, and $0.39 per share, diluted, for the same period in 2007. Net income per share for the six-months ended June 30, 2008 was $0.59 per share, basic, and $0.51 per share, diluted, compared to a net income of $0.77 per share, basic, and $0.70 per share, diluted, for the same period in 2007.

The primary drivers of the decrease in net income were the effects of lower operating income discussed above, partially offset by a lower effective tax rate.

Operating Highlights

During the three and six months ended June 30, 2008, net sales of Vancocin increased 16.6 percent and 10.7 percent, respectively, compared to the same periods in 2007 primarily due to an increase in the number of units sold to wholesalers and the impact of a price increase during 2008.

The cost of sales for Vancocin for the three and six months ended June 30, 2008 decreased $0.2 million and $0.6 million, respectively, as compared to the same periods in 2007. For the three and six month periods ended June 30, 2008 the cost of sales was $2.4 million and $4.3 million, respectively, compared to $2.6 million and $4.9, respectively, for the same period in 2007.

Investment in our product pipeline and the Company continued to grow as research and development (R&D) and selling, general and administrative (SG&A) expenses in the second quarter and six-months ended June 30, 2008 were $31.2 million and $59.0 million, respectively compared to $15.6 million and $28.1 million for the second quarter and six-months of 2007, respectively. These increases were due primarily to the increased costs, including the costs of increased personnel, associated with our phase 3 program for maribavir, along with increased selling, general and administrative expense due to compensations costs, including share-based compensation, which resulted from increased headcount for our European operations and our Vancocin sales force, as well as medical education activities and marketing efforts.

The Company's effective income tax rate was 25.6 percent and 22.7 percent for the quarters ended June 30, 2008 and 2007, respectively, and 26.8 percent and 30.6 percent for the six months ended June 30, 2008 and 2007, respectively. Income tax expense includes federal, state and foreign income tax at statutory rates and the effects of various permanent differences. The variances in the effective rate for the quarter and six-months ended June 30, 2008 as compared to the comparative periods in 2007 is primarily due to our current estimate of the impact of orphan drug credit for maribavir. We currently anticipate an effective tax rate in the range of approximately 25 percent to 30 percent for the year ended December 31, 2008, which includes an estimate related to orphan drug credit based upon estimates of qualified expenses and excludes the impact of discreet items and any potential changes in the valuation allowance. We continue to evaluate our qualified expenses and, to the extent that actual qualified expenses vary significantly from our estimates, our effective tax rate will be impacted.

Regarding additional payments due to Lilly in connection with the Vancocin acquisition, net sales as of June 30, 2008 exceeded the milestone threshold of $45.0 million. As a result, the Company recorded additional purchase price of $7.0 million to intangible assets in 2008. No purchase price consideration will be due to Lilly relating to net sales occurring in the remainder of 2008.

Working Capital Highlights

As of June 30, 2008, ViroPharma's working capital was approximately $644.0 million, which represents a $49.6 million increase from December 31, 2007, $24.5 million of which occurred in the second quarter of 2008. The six month increase is primarily the result of cash flows provided by sales of Vancocin.

Business Development Highlights

As more fully detailed in a Current Report on Form 8-K filed with the Securities and Exchange Commission, on July 15, 2008, we announced that we signed a definitive merger agreement with Lev Pharmaceuticals, Inc. (Lev), pursuant to which we will acquire Lev. The merger agreement provides for HAE Acquisition Corp., our wholly owned merger subsidiary, to merge with and into Lev with Lev continuing as the surviving company. The terms of the merger agreement provide for the conversion of each share of Lev common stock into upfront consideration of $2.75 per Lev share, comprised of $2.25 per share in cash and $0.50 per share in our common stock (subject to collars), and contingent consideration of up to $1.00 per share which may be paid upon achievement of certain regulatory and commercial milestones.

The merger agreement contains certain termination rights for us and Lev, as the case may be, applicable upon the occurrence of certain events specified in the merger agreement. The merger agreement provides that, in the event of the termination of the merger agreement under specified circumstances, Lev may be required to pay us a termination fee.

The merger agreement provides for both ViroPharma and Lev to conduct our respective businesses in the ordinary course until the merger is completed and not to take certain actions during the period from the date of the merger agreement until the date of completion of the merger.

The transaction with a potential net aggregate value of up to approximately $617.5 million has been unanimously approved by the boards of directors of both companies. We expect the transaction to be completed by the end of 2008. In addition, concurrently with the execution of the merger agreement, we made a $20 million investment in Lev common stock to provide Lev with short and medium term financing in connection with the commercialization of its product candidate Cinryze(TM).

Looking ahead in 2008

ViroPharma is commenting upon guidance for the year 2008 as a convenience to investors. The following guidance provided by ViroPharma are projections, based upon numerous assumptions, all of which are subject to certain risks and uncertainties. For a discussion of the risks and uncertainties associated with these forward looking statements, please see the Disclosure Notice below. The guidance below excludes the acquisition and operations of Lev Pharmaceuticals.

For the year 2008, ViroPharma expects the following

-- Net product sales are expected to be $220 to $240 million;

-- Research and development (R&D) and selling, general and administrative (SG&A) expenses, excluding the impact of SFAS 123R, are expected to be $110 to $120 million.

-- The SFAS 123R impact to the above expenses will be in the range of $9 to $11 million. Including the impact of SFAS 123R, the research and development (R&D) and sales, general and administrative (SG&A) expenses are expected to be between $119 and $131 million.

Non-GAAP Disclosures

This press release includes non-GAAP financial information as the Company's projected research and development and marketing, general and administrative expenses has been presented excluding the effect of stock option expense resulting from the application of SFAS 123R. The Company believes that presenting its research and development (R&D) expense and sales, general and administrative (SG&A) expense in this release both with and without the impact of share-based compensation will allow investors to better understand the Company's financial results and how such results compare with the Company's prior results and current guidance.

Conference Call and Webcast

ViroPharma is hosting a live teleconference and webcast with senior management to discuss the financial announcement, guidance, and other business results on July 30, 2008 at 9:00 a.m. Eastern Time. To participate in the conference call, please dial 888-299-4099 (domestic) and 302-709-8337 (international). After placing the call, please tell the operator you wish to join the ViroPharma investor conference call.

Alternatively, the live webcast of the conference call can be accessed via ViroPharma's website at viropharma.com. Windows Media or Real Player will be needed to access the webcast. An audio archive will be available at the same address until August 15, 2008.

About ViroPharma Incorporated

ViroPharma Incorporated is committed to the development and commercialization of products that address serious diseases treated by physician specialists and in hospital settings. ViroPharma commercializes Vancocin® approved for oral administration for treatment of antibiotic-associated pseudomembranous colitis caused by Clostridium difficile and enterocolitis caused by Staphylococcus aureus, including methicillin-resistant strains (for prescribing information, please download the package insert at viropharma.com). ViroPharma currently focuses its drug development activities in infectious diseases including cytomegalovirus (CMV) and non-toxigenic C. difficile (NTCD). For more information on ViroPharma, visit the Company's website at viropharma.com.

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From: IRWIN JAMES FRANKEL8/4/2008 9:25:37 AM
   of 62
 
ViroPharma: Lev Acquisition Appraisal
by: Value Geek posted on: August 03, 2008 | about stocks: LEVP.OB / VPHM

ViroPharma (VPHM) recently acquired Lev Pharmaceuticals (LEVP.OB) for $443 million ($2.75 per Lev share), primarily for its orphan drug Cinryze, which is used to treat HAE (hereditary angioedema). There are additional payouts of $0.50 per share if Cinryze gets approved by the FDA, and another $0.50 per share if total sales of Cinryze reaches $600 million within a decade, which would make the total price $617 million.

ViroPharma was previously consistently losing money before it acquired the orphan drug Vancocin from Eli Lilly (LLY) for $116M. This turned out to be a stroke of genius, as ViroPharma was able to aggressively hike the price of Vancocin, resulting in annual revenues of $200M in 2007, and more than recouping the cost of acquisition in merely 2 years. I was hoping that the CEO would be able to repeat his past performance and use ViroPharma’s large cash hoard to make another brilliant acquisition. However, on examining the Lev acquisition, I believe that the CEO may have traded hard cash for a very risky endeavor this time around.

HAE is caused by a genetic mutation leading to low serum levels of C1 esterase inhibitor and unchecked inflammation. Patients suffer sporadic attacks of swelling that may occur in the hands, legs, face, throat, genitals or gastro-intestinal tract. These attacks are very painful but usually spontaneously resolve, although swelling of the airways can lead to death by suffocation. An estimated 1 in 30 000 people suffer from HAE, which suggests a total patient population of 10 000 in the US, with 4 600 diagnosed cases (while a simple blood test provides a definitive HAE diagnosis, many patients are misdiagnosed as having an allergic reaction).

ViroPharma is projecting that one quarter of the diagnosed patients will buy its drug at an annual cost of $300 000, which would make annual sales $345M. This “rob-Medicare-and-insurers” business model was made popular by Genzyme with its flagship product Cerezyme, currently the poster child of exorbitant drug pricing, with an average annual treatment cost of $300 000. Many health-care economists argue that the Orphan Drug Act is now doing more harm than good, and is a major contributor to the rapidly inflating cost of health insurance. Increasingly, the orphan drug companies are being seen as extorting their profits from vulnerable patients with their legally sanctioned drug monopolies. Some form of government regulation may well be crafted in the future to moderate the excesses caused by the current Orphan Drug Act.

The Orphan Drug Act stipulates that the first company that completes a clinical trial demonstrating the efficacy of a drug against an orphan disease is granted a monopoly for that drug. There are five companies currently developing drugs for HAE (Dyax, Jerini, Pharming, CSL Behring, and Lev). CSL Behring and Lev both prepare a C1 esterase inhibitor concentrate from human plasma, and both drugs have a long history of use in Europe.

Because the two drugs are essentially the same entity and theoretically cannot be granted orphan drug status simultaneously (the other companies’ drugs are generally considered independent molecules and will not block each other’s orphan drug status), most analysts believe that FDA will avoid a thorny decision by assigning both drugs orphan status, but for slightly different indications. Cinryze (Lev’s drug), will likely be approved for prophylactic treatment, while Berinert (Behring’s drug) will likely be approved for acute treatment of HAE.

Some analysts cite Cinryze’s prophylactic use as reason to assign a higher price to Lev, since prophylactic use will be much more profitable, but I believe this is an incorrect argument, as doctors can always prescribe drugs for off-label use. Therefore, there will most probably be at least two, and probably more, drugs competing head-to-head for the same patients. Hence, I believe that pricing of Cinryze is not likely to approach that of Cerezyme, which has no competition whatsoever.

Finally, a major unknown is the frequency of drug use expected with HAE patients. In the case of Cerezyme, its target disease is Gaucher’s disease, which is caused an inability to break down certain fats, leading to an accumulation of toxic products in organs. Prophylactic treatment in Gaucher disease is widely accepted, as continued buildup of lipids eventually leads to organ failure.

In the case of HAE, the medical community has not come to a consensus treatment regime. Studies in Europe suggest that HAE patients suffer an average of 7 attacks a year, and there are reports that many patients are able to sense the onset of an HAE attack, much like how some people can sense migraine attacks, and may be able to reach emergency rooms in time.

As it is unclear how many HAE patients actually die from the attacks, doctors in Europe tend to treat patients with infrequent attacks acutely, reserving prophylactic treatment for patients with very frequent attacks. In the US, due to the lack of an approved drug, many HAE patients obtain HAE drugs through “personal importation” from Europe, and keep several vials at home or with their doctors for acute administration during an attack. Many doctors may be tempted to stick to status-quo even with an available approved drug. Certainly, their insurers will likely pressure them to use the drug sparingly.

In the best case scenario, all companies price their drugs at a high level and insurers stomach the cost. If 1500 patients pay $150 000 annually, this will result in $225M in revenue, and perhaps $10M in manufacturing costs and $65M in taxes, resulting in $150M in net income. This would be approximately 25% annual return on the $600M acquisition cost.

In the worst case scenario, competition brings the cost of drugs down, and this is combined with insurers willing to treat patients on an acute basis only. Berinert and comparable HAE drugs are priced at around $800 a dose in Europe (one dose is used in a mild attack, 2 doses in a severe one). I will assume that competition in the US brings down Cinryze’s price to $1500 a dose (since an FDA approved drug should carry a premium). If 1500 patients suffer 10 attacks annually and use 2 doses each time, this will result in an annual revenue of $45M, which after $10M in manufacturing costs and $10M in taxes yield $25M in net income, or a paltry 4% return on investment. Note that the above scenarios are just guesses. There are considerable uncertainties about the potential patient pool size and final pricing levels and treatment regimes. In addition, there is an outside chance that Cinryze may prove helpful in heart attacks and strokes.

Personally, I believe that a 25-30% return on investment is probably the best that can be achieved in this acquisition. An extra $150M in annual earnings will add an EPS of $2.14 to VPHM’s bottom line, which could well bring the stock to the low $20s. However, a flop will mean exchanging $600M in cash ($8.57 per share) for $25M net income, which would be a net loss of about $5-6 per share (depending on the earnings multiple you assign).

The most likely outcome is somewhere between the two extremes, and on balance, the acquisition is likely neutral to the share price. However, this acquisition adds substantial risk to ViroPharma, and for that reason, I have chosen to liquidate my position in VPHM.
seekingalpha.com

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From: IRWIN JAMES FRANKEL8/5/2008 1:33:50 PM
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ROCKVILLE, Md., Aug. 4 -- The FDA announced tougher conflict-of-interest rules today for members of its independent advisory committees and changed the way they will vote yea or nay to recommend approval of a drug or device.

The agency said that advisers would not be allowed to participate on a committee if they or a minor child or spouse own a conflicting financial interest worth more than $50,000 -- half the old automatic exclusion level.


Previously, potential advisory committee members were screened to determine whether they had a potential financial conflict of interest, such as grants, stock holdings and contracts with a company that would be affected by the committee's recommendations.


Those with investments exceeding $100,000 in a company likely to be affected by the meeting outcome or those whose investments exceed 15% of their net worth were automatically excluded. A lower level of investment conflict was permitted but a waiver was needed.


Now the agency has established a firm financial cap.


In order to issue a conflict-of-interest waiver for those who have no financial interest, or a less-than $50,000 financial interest, the new guidelines would require the agency to prove that that the adviser has "essential expertise" that is unique.


At the same time, the agency has established new voting rules to ensure that individual members will not influence others with their votes.


Instead of one-by-one voting, all committee members will vote simultaneously to diminish the chance that individual members will be swayed by "voting momentum," said the FDA.


The guidelines also clarify when the FDA should consult an advisory committee. Although the FDA is legally required to consult an advisory panel in some instances, the agency often decides on a case-by-case basis whether to call in outside opinion.


The new guidelines provide a three-pronged test to determine whether to convene an advisory panel: if the matter is of "significant public interest," if the matter is extremely controversial, or if an advisory panel is necessary to provide the expertise needed for full consideration of a matter by the FDA.


When it comes to products that have never before been used in humans, or if the product is the first to be approved in its class, the FDA must either refer the product to an advisory committee, or provide an "action letter" explaining why the product was approved before a committee recommended its use in humans.


Except for new rules on waiver, the other new guidelines will go into effect immediately.

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To: IRWIN JAMES FRANKEL who wrote (48)8/5/2008 1:38:34 PM
From: IRWIN JAMES FRANKEL
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>>When it comes to products that have never before been used in humans, or if the product is the first to be approved in its class, the FDA must either refer the product to an advisory committee, or provide an "action letter" explaining why the product was approved before a committee recommended its use in humans.

Appears to me that FDA would not be able to approve CSL's C1 Inh [PDUFA 9/6/2008] without an advisory committee or an "action letter" to explain why they did not call a committee.

ij

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