EXTON, Pa., Oct. 31, 2013 /PRNewswire/ -- ViroPharma
Incorporated (Nasdaq: VPHM) reported today its financial results
for the third quarter ended September
30, 2013. Net sales were $113
million for the third quarter ended September 30, 2013, as compared to $91 million in the same three months of 2012.
The increase was primarily driven by growth in U.S. Cinryze
sales. Cinryze U.S. sales of $102
million during the quarter reflect true patient demand as
channel inventory levels remain unchanged from the prior
quarter.
"The third quarter of 2013 represented another extremely strong
period of growth and positive momentum across our entire
organization," stated Vincent
Milano, ViroPharma's chief executive officer. "We continue
to generate strong growth in our commercial business, notably led
by the acceleration of Cinryze demand here in the United
States. Our pipeline also continues to advance, establishing
a number of important data points over the next several
months."
Our GAAP net income was $4 million
in the third quarter of 2013 compared to GAAP net loss of
$5 million in the third quarter of
2012. For the nine months ended September
30, 2013, GAAP net loss was $59
million compared to $10
million of GAAP net income during the first nine months in
2012. As a reminder, the GAAP net loss for the nine month
period of 2013 was primarily driven by the $104 million impairment charge related to the
Vancocin intangible asset.
Non-GAAP adjusted net income for the three and nine months ended
September 30, 2013 was $16 million and $38
million, respectively, compared to $7
million and $44 million for
the same periods in 2012. A reconciliation between GAAP and
non-GAAP adjusted measures is provided in the Selected Financial
Information – Non-GAAP Financial Measures Reconciliation table
included with this release.
Operating Highlights
Our U.S. net sales of Cinryze during the three and nine months
ended September 30, 2013 increased to
$102 million and $290 million, from sales of $84 million and $226
million, respectively, during the same periods in the prior
year due to demand growth.
Cost of sales increased for the three and nine months ended
September 30, 2013 primarily due to
the effect of continuing growth of Cinryze.
Research and development costs increased in the third quarter of
2013 compared to the same period in 2012 due to advancement of our
numerous pipeline development programs. Selling, general and
administrative expenses in the three and nine months ended
September 30, 2013 were relatively
flat compared to the same periods of 2012.
For the nine months ended September 30,
2013, we recorded a $36
million tax benefit, compared to an $11 million tax expense in the prior year's
period.
Working Capital Highlights
At September 30, 2013, our working
capital was $403 million which
included cash, cash equivalents and short term investments of
$275 million.
Financial
Highlights ($ in millions, except per share data)
|
|
Q3
2013
|
Q3
2012
|
Percent
Change
|
Total net product
sales
|
$113.1
|
$91.0
|
+24%
|
Cinryze U.S. net
product sales
|
102.2
|
83.7
|
+22%
|
EU net product
sales
|
10.2
|
3.6
|
+183%
|
GAAP net income
(loss)
|
4.2
|
(4.6)
|
|
Non-GAAP adjusted net
income
|
16.2
|
7.5
|
|
GAAP diluted net
income (loss) per share
|
0.06
|
(0.07)
|
|
Non-GAAP adjusted
diluted EPS
|
0.20
|
0.10
|
|
|
|
|
|
Non-GAAP Disclosures
The Company is reporting both GAAP net income (loss) and
non-GAAP adjusted results for the three and nine months ended
September 30, 2013 and 2012. Non-GAAP
adjusted net income is GAAP net income (loss) excluding (1)
non-cash interest expense, (2) amortization related to intangible
assets acquired, (3) share-based compensation expense, (4) changes
in contingent consideration, (5) option amortization and (6)
certain non-recurring events, including impairment losses. Non-GAAP
adjusted diluted net income per share reflects the Non-GAAP
adjusted net income, after the incremental effect of applying the
"if converted" method of accounting to the senior convertible
notes, and the diluted shares used in determining our GAAP diluted
net income (loss) per share. A reconciliation between GAAP
and non-GAAP adjusted measures is provided in the Selected
Financial Information – Non-GAAP Financial Measures Reconciliation
table included with this release. The Company believes that its
presentation of historical non-GAAP financial measures provides
useful supplementary information to and facilitates additional
analysis by investors. These historical non-GAAP financial measures
are in addition to, not a substitute for, or superior to, measures
of financial performance prepared in accordance with U.S. Generally
Accepted Accounting Principles.
Research and Development Programs
ViroPharma is investing in research and development programs to
ensure growth for the future. The current pipeline includes
programs in various stages of clinical and pre-clinical development
focused on rare diseases and serious unmet medical needs.
- Subcutaneous administration of Cinryze – We are
advancing a low-volume formulation of subcutaneous Cinryze into a
Phase 1 tolerability study in healthy subjects. We intend to
hold an end of phase 2 meeting with the FDA in the first quarter of
2014 with the target of initiating a phase 3 registration study of
our subcutaneous Cinryze formulation in mid-2014.
- New uses for C1 INH - We are investigating potential new
uses for our C1 esterase inhibitor product with a goal of pursuing
additional indications in patient populations with other C1 INH
mediated diseases. Studies in Neuromyelitis Optica (NMO) and
Antibody-Mediated Rejection (AMR) post renal transplantation have
been completed. We expect to share more about these data and
our plans at the 2014 JP Morgan Healthcare Conference in January.
Our ex-VIVO study evaluating the effect of C1-INH in Refractory
Paroxysmal Nocturnal Hemoglobinuria has been accepted as an oral
presentation at the 2013 American Society of Hematology (ASH)
annual meeting in December of this year.
- Maribavir for cytomegalovirus – We are currently
enrolling patients into a Phase 2 program to evaluate maribavir for
the treatment of CMV infections in transplant recipients. The
program consists of two independent Phase 2 clinical studies that
include subjects who have asymptomatic CMV in one trial, and those
who have failed therapy with other anti-CMV agents in another
trial. Interim data from these studies was presented in June
of 2013. Enrollment into both studies continues to accelerate
and we expect to complete enrollment in both studies in the first
half of 2014.
- VP-20629 for Friedreich's Ataxia (FA) – We initiated a
single and multiple oral dose safety and tolerability study in
patients in 2013. The company anticipates completion of enrollment
in the first half of 2014.
- Oral Budesonide for eosinophilic esophagitis (EOE) – We
currently have an exclusive option agreement to acquire Meritage
Pharma, Incorporated pending data outcomes from a Phase 2 study and
concurrence with the U.S. FDA on an acceptable clinical endpoint
for the Phase 3 program. The Phase 2 study is currently
enrolling with data expected in 2014.
2013 Guidance
ViroPharma is providing guidance for the year 2013 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.
For the year 2013, ViroPharma is updating the
following:
- Worldwide net product sales are expected to be
$445 to $465 million;
- Net North American Cinryze sales are expected to be
$395 to $405 million; and
- Research and development (R&D) and selling, general and
administrative (SG&A) expenses are expected to be
$240 to $260 million.
Conference Call and Webcast
ViroPharma is hosting a live teleconference and webcast with
senior management to discuss the financial announcement, guidance,
and all other operational results of the first quarter and discuss
developments in the subcutaneous Cinryze clinical development
program on October 31, 2013 at
9:00 a.m. Eastern. To participate in
the conference call, please dial (800) 874-4559 (domestic) and
(302) 607-2019 (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
http://www.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 November
15, 2013.
About ViroPharma Incorporated
ViroPharma Incorporated is an international biopharmaceutical
company committed to developing and commercializing novel solutions
for physician specialists to address unmet medical needs of
patients living with diseases that have few if any clinical
therapeutic options. ViroPharma is developing a portfolio of
therapeutics for rare and Orphan diseases including C1 esterase
inhibitor deficiency, cytomegalovirus (CMV), Friedreich's Ataxia,
eosinophilic esophagitis (EoE) and adrenal insufficiency. Our goal
is to provide rewarding careers to employees, to create new
standards of care in the way serious diseases are treated, and to
build international partnerships with the patients, advocates, and
health care professionals we serve. ViroPharma's commercial
products address diseases including hereditary angioedema (HAE),
seizures in children and adolescents, adrenal insufficiency and
C. difficile-associated diarrhea (CDAD). For full U.S.
prescribing information on our products, please download the
package inserts at http://www.viropharma.com/Products.aspx; the
prescribing information for other countries can be found at
www.viropharma.com.
ViroPharma routinely posts information, including press
releases, which may be important to investors in the investor
relations and media sections of our company's web site,
www.viropharma.com. The company encourages investors to consult
these sections for more information on ViroPharma and our
business.
Disclosure Notice
Certain statements in this press release
contain forward-looking statements that involve a number of risks
and uncertainties. Forward-looking statements provide our current
expectations or forecasts of future events. Forward looking
statements in this press release include our financial guidance for
2013, the rate of future growth, the rate at which we are able to
identify new Cinryze patients in the
United States, our ability to continue to successfully
commercialize our products in the United
States and Europe, and our
ability to conduct additional studies in the timeframes we
anticipate.
Our actual results may vary depending on a variety of factors,
including:
- our ability to identify patients, the size of the market,
future growth potential and market share for our commercial
products in the territories in which they are marketed;
- the availability of sufficient third party payer reimbursement
for each of our products in the United
States and Europe;
- fluctuations in wholesaler order patterns and inventory
levels;
- competition from the approval of products which are currently
marketed for other indications by other companies or new
pharmaceuticals and technological advances to treat the conditions
addressed by Cinryze, Vancocin, Buccolam and Plenadren;
- changes in prescribing or procedural practices of physicians,
including off-label prescribing of products competitive with
Vancocin, Cinryze, Buccolam and Plenadren;
- manufacturing, supply or distribution interruptions, including
but not limited to our ability to acquire adequate supplies of
Cinryze and our other products in order to meet demand for each
product;
- our ability to receive regulatory approval for the use of
Cinryze for additional indications and routes of administration and
in additional territories in the timeframes we anticipate or at
all;
- the impact of healthcare reform legislation;
- actions by the FDA and EMA or other government regulatory
agencies;
- the timing and results of anticipated events in our clinical
development programs including studies with Cinryze subcutaneous
formulation, and maribavir for treatment of CMV infections in
transplant recipients; and,
- the timing and nature of potential business development
activities related to our efforts to expand our current portfolio
through in-licensing or other means of acquiring products in
clinical development or marketed products.
There can be no assurance that we will conduct additional
studies or that we will be successful in gaining regulatory
approval of Cinryze for additional indications, routes of
administration or in additional territories. The entry of
competing generic products following FDA approval in April 2012 has and will continue to significantly
affect our sales of Vancocin and our financial performance.
Biologics such as Cinryze require processing steps that are more
difficult than those required for most chemical pharmaceuticals,
and as a result, Sanquin, our manufacturer of Cinryze has received
observations on Form 483 and a warning letter which require us to
continue to meet commitments made to the FDA related to various
manufacturing issues. In the event Sanquin fails to meet these
commitments, the FDA may take actions that limit our ability to
manufacture Cinryze. In the event Sanquin is not able to
manufacture the anticipated volume of product at the industrial
scale as a result of either FDA requirements, batch failures,
variability in batch yields, required maintenance, as a result of
the warning letter or other causes, we may not be able to satisfy
patient demand or build safety stock. Our inability to obtain
adequate product supplies to satisfy our patient demand may create
opportunities for our competitors and we will suffer a loss of
potential future revenues. These factors, and other factors,
including, but not limited to those described in ViroPharma's
Annual report on Form 10-K for the year ended December 31, 2012 and our subsequent Quarterly
Reports on Form 10-Q for the periods ended March 31, 2013 and June
30, 2013 and our Current Report on Form 8-K dated
August 29, 2013, could cause future
results to differ materially from the expectations expressed in
this press release. The forward-looking statements contained in
this press release may become outdated over time. ViroPharma does
not assume any responsibility for updating any forward-looking
statements.
VIROPHARMA
INCORPORATED
|
Selected Financial
Information
|
|
(unaudited)
|
|
(unaudited)
|
Consolidated
Statements of Operations:
|
Three months
ended
|
|
Nine months
ended
|
(in thousands, except
per share data)
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Net product
sales
|
$
113,062
|
|
$
91,004
|
|
$
323,922
|
|
$
321,444
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Cost of sales
(excluding amortization of product rights)
|
27,479
|
|
21,552
|
|
85,496
|
|
81,719
|
Research and
development
|
18,092
|
|
16,547
|
|
52,453
|
|
48,567
|
Selling, general and
administrative
|
45,499
|
|
44,293
|
|
134,457
|
|
123,337
|
Intangible
amortization
|
7,689
|
|
8,830
|
|
24,271
|
|
26,444
|
Impairment
loss
|
-
|
|
-
|
|
104,245
|
|
-
|
Other operating
expenses
|
3,605
|
|
3,955
|
|
6,372
|
|
6,010
|
Total costs and
expenses
|
102,364
|
|
95,177
|
|
407,294
|
|
286,077
|
Operating income
(loss)
|
10,698
|
|
(4,173)
|
|
(83,372)
|
|
35,367
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
Interest
income
|
154
|
|
128
|
|
472
|
|
406
|
Interest
expense
|
(3,698)
|
|
(3,529)
|
|
(10,989)
|
|
(10,494)
|
Other income
(expense), net
|
3,530
|
|
(1,213)
|
|
(1,116)
|
|
(4,762)
|
Income (loss) before
income tax expense (benefit)
|
10,684
|
|
(8,787)
|
|
(95,005)
|
|
20,517
|
Income tax expense
(benefit)
|
6,498
|
|
(4,220)
|
|
(35,793)
|
|
10,878
|
Net income
(loss)
|
$
4,186
|
|
$
(4,567)
|
|
$
(59,212)
|
|
$
9,639
|
|
|
|
|
|
|
|
|
Basic net
income (loss) per share
|
$
0.06
|
|
$
(0.07)
|
|
$
(0.91)
|
|
$
0.14
|
Diluted net
income (loss) per share
|
$
0.06
|
|
$
(0.07)
|
|
$
(0.91)
|
|
$
0.13
|
|
|
|
|
|
|
|
|
Shares used in
computing net income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
65,628
|
|
67,606
|
|
65,398
|
|
69,164
|
Diluted
|
71,748
|
|
67,606
|
|
65,398
|
|
72,190
|
|
|
|
|
|
|
|
|
VIROPHARMA
INCORPORATED
|
Selected Financial
Information
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Net Income (Loss) to Adjusted Non-GAAP Net
Income
|
|
An itemized
reconciliation between net income (loss) and adjusted net income on
a non-GAAP basis is as follows:
|
|
|
|
|
(in thousands, except
per share data)
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
4,186
|
|
$
(4,567)
|
|
$
(59,212)
|
|
$
9,639
|
Adjustments:
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
2,496
|
|
2,325
|
|
7,385
|
|
6,882
|
Amortization
|
7,689
|
|
8,830
|
|
24,271
|
|
26,444
|
Share-based
compensation
|
6,629
|
|
5,751
|
|
18,912
|
|
16,111
|
Option
amortization
|
1,378
|
|
1,084
|
|
3,547
|
|
2,740
|
Contingent
consideration
|
1,506
|
|
1,748
|
|
1,548
|
|
3,594
|
Impairment
loss
|
-
|
|
-
|
|
104,245
|
|
-
|
Tax effect of the
above
|
(7,682)
|
|
(7,698)
|
|
(62,364)
|
|
(21,751)
|
Non-GAAP adjusted net
income
|
$
16,202
|
|
$
7,473
|
|
$
38,332
|
|
$
43,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computation of
Non-GAAP Adjusted Diluted Net Income per Share
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
income
|
$
16,202
|
|
$
7,473
|
|
$
38,332
|
|
$
43,659
|
Add interest expense
on senior
convertible notes, net of income tax
|
625
|
|
625
|
|
1,875
|
|
1,875
|
Non-GAAP adjusted
diluted net income
|
$
16,827
|
|
$
8,098
|
|
$
40,207
|
|
$
45,534
|
|
|
|
|
|
|
|
|
Shares used in
computing GAAP diluted
net income (loss) per share
|
71,748
|
|
67,606
|
|
65,398
|
|
72,190
|
Shares used in
computing Non-GAAP
adjusted diluted net income per share
|
82,611
|
|
81,429
|
|
80,527
|
|
83,054
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
$
0.06
|
|
$
(0.07)
|
|
$
(0.91)
|
|
$
0.13
|
Non-GAAP adjusted
diluted net income
per share
|
$
0.20
|
|
$
0.10
|
|
$
0.50
|
|
$
0.55
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
Our "non-GAAP adjusted net income" excludes the following items
from GAAP net income (loss):
1. Non-cash interest expense: Non-GAAP adjusted net income
excludes non-cash interest expense on our convertible notes. We
believe that excluding the non-cash portion of our interest expense
allows management and investors an alternative view of our
financial results "as if" our net income reflected only the cash
portion of our interest expense.
2. Purchase accounting and product acquisition related
adjustments: Non-GAAP adjusted net income excludes certain items
related to our acquisitions. The excluded items may include among
other adjustments; charges related to amortization of intangible
assets arising from acquisitions and changes in the fair value of
future contingent consideration or significant transaction
costs.
3. Share-based compensation expense: Non-GAAP adjusted net
income excludes the impact of our non-cash share-based compensation
expense. We believe that excluding the impact of expensing
share-based compensation better reflects the recurring economic
characteristics of our business.
Non-GAAP net income may exclude unusual or non-recurring items
that are evaluated on an individual basis. Our evaluation of
whether to exclude an item for purposes of determining our non-GAAP
financial measures considers both the quantitative and qualitative
aspects of the item, including, among other things (i) its size and
nature, (ii) whether or not it relates to our ongoing business
operations, and (iii) whether or not we expect it to occur as part
of our normal business on a regular basis. For purposes of
determining non-GAAP net income, items such as asset impairment or
upfront fees or milestone payments under license agreements, may be
excluded, among others, which will be evaluated on an individual
basis.
VIROPHARMA
INCORPORATED
|
Selected Financial
Information
|
|
|
|
|
|
|
Selected
Consolidated Balance Sheet Data
|
|
September
30,
|
|
December
31,
|
(in
thousands)
|
|
2013
|
|
2012
|
|
|
(unaudited)
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
205,586
|
|
$
175,518
|
Short-term
investments
|
|
69,608
|
|
71,338
|
Inventory
|
|
100,121
|
|
64,384
|
Total current
assets
|
|
494,633
|
|
453,418
|
Intangible assets,
net
|
|
489,584
|
|
617,539
|
Goodwill
|
|
96,798
|
|
96,759
|
Total
assets
|
|
1,136,203
|
|
1,219,952
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Total current
liabilities
|
|
$
91,787
|
|
$
114,028
|
Deferred tax
liabilities
|
|
115,901
|
|
167,484
|
Long-term
debt
|
|
168,467
|
|
161,793
|
Total
liabilities
|
|
408,294
|
|
462,913
|
Total stockholders'
equity
|
|
727,909
|
|
757,039
|
Total liabilities and
stockholders' equity
|
|
1,136,203
|
|
1,219,952
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
Selected Statement
of Cash Flow Data:
|
|
2013
|
|
2012
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
18,370
|
|
$
74,800
|
Net cash used in by
investing activities
|
|
(437)
|
|
(63,337)
|
Net cash provided by
(used in) financing activities
|
11,286
|
|
(137,304)
|
|
|
|
|
|
SOURCE ViroPharma Incorporated