UPDATE: Bank of America Downgrades ViroPharma on Valuation

In a report published Wednesday, Bank of America analyst Rachel McMinn downgraded the rating on

from Neutral to Underperform, but reiterated the $34.00 price target. In the report, Bank of America noted, “VPHM shares have increased 33% in response to a media article written Sep 12 speculating that the co has engaged an advisor to consider an auction of the business, and naming Sanofi and Shire as two potentially interested acquirers. While a VPHM acquisition could be financially attractive, we believe a number of longer term risks on the company's core product, Cinryze, could affect any such acquisition. In our view, the biggest risk to Cinryze's value is successful development of BCRX's oral HAE drug (proof of principle data 2014). We believe the current VPHM share price reflects a not insignificant chance of the company being acquired. However, notwithstanding this, based on the product-related risks, we struggle to see any basis to increase our $34 PO. Thus, we are downgrading from Neutral to Underperform on valuation.” ViroPharma closed on Tuesday at $40.78.