EXTON, Pa., May 1, 2013 /PRNewswire/ -- ViroPharma
Incorporated (Nasdaq: VPHM) today announced financial results for
the first quarter of 2013. Net sales were $107 million for the first quarter ended
March 31, 2013 as compared to
$136 million in the comparative
period of 2012. The decline in net sales quarter over quarter
was driven by the decrease in Vancocin revenues partially
offset by commercial product growth for Cinryze. The first quarter
2013 U.S. Cinryze net sales which grew by 44 percent over the first
quarter of 2012 to $97 million,
including approximately $91 million
of patient demand. The balance represented additional
inventory in the channel.
"The early part of 2013 has seen great progress both in our
commercial business as well as our development pipeline," stated
Vincent Milano, ViroPharma's chief
executive officer. "In addition to the virologic response data we
will share during our conference call today from subjects enrolled
into our two maribavir studies, we also expect results from several
key programs for Cinryze in the coming quarters such as
subcutaneous Cinryze administration, antibody-mediated rejection
(AMR) in kidney transplant, new uses for C1 INH, as well as
additional progress updates with maribavir."
Our GAAP net loss was $64 million
in the first quarter of 2013 compared to net income of $20 million in the first quarter of 2012.
GAAP diluted net loss per share was $(0.98) for the first quarter of 2013 compared to
GAAP diluted earnings per share of $0.26 for the same period in 2012. The loss for
the quarter was driven by a $104
million non-cash impairment charge related to the Vancocin
intangible asset due to rapid decline in market price of generic
vancomycin. Also driving the quarter over quarter decrease was the
loss of Vancocin revenues partially offset by the continued growth
of Cinryze.
Non-GAAP adjusted net income for the three months ended
March 31, 2013 was $11 million, compared to $31 million for the same period in 2012.
Non-GAAP adjusted diluted net earnings per share was $0.15 for the first quarter of 2013 compared to
$0.37 for the same period 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
Cinryze net sales during the first quarter of 2013 were
$99.5 million, a 46 percent increase
over the same period in 2012 driven by demand growth, rebuilding
channel inventories and net realized price growth. Vancocin
net sales during the three months were $4
million compared to $66
million for the same period in 2012. The decrease is due to
the impact of the launch of generic versions of vancomycin in April
of 2012. During the first quarter of 2013, we generated net sales
of approximately $7 million from our
European operations.
Cost of sales decreased for the three months ended March 31, 2013 as compared to the three months
ended March 31, 2012 by $2 million. The decrease in cost of sales was due
to product mix and overall sales decline of Vancocin compared to
the same period in the prior year. We anticipate that our cost of
sales, on a relative basis, will remain higher than historical
levels due to the introduction of generic vancomycin and the
reduction of our sales of Vancocin relative to our Cinryze sales
along with the royalty due to Genzyme on Vancocin-related
sales.
Research and development costs incurred during the first quarter
of 2013 increased compared to the same period in 2012 due to
advancements in our clinical development programs, including the
subcutaneous Cinryze and maribavir development programs, among
others. The increase in selling, general and administrative
expenses for the first quarter of 2013 compared to the same period
in 2012 was driven by the growth of our global organization and our
European commercialization efforts.
Because our Vancocin intangible asset is amortizable for tax
purposes, we recorded a tax benefit of $41
million related to the impairment of the asset. We
recognized a total tax benefit of $42
million in the quarter ended March
31, 2013 compared to a tax expense of $18 million in the quarter ended March 31, 2012.
Working Capital Highlights
At March 31, 2013, our working
capital was $356 million, which
included cash, cash equivalents and short term investments of
$261 million. During the first
quarter of 2013 we generated $14
million net cash from operations.
Financial Highlights ($ in millions, except per
share data)
|
|
|
Q1
2013
|
Q1
2012
|
Percent
Change
|
Total net
product sales
|
$107.1
|
$135.8
|
-21%
|
Cinryze
U.S. net product sales
|
96.8
|
67.0
|
+44%
|
EU net
product sales
|
6.8
|
2.7
|
+152%
|
Vancocin
net product sales
|
3.6
|
66.2
|
-95%
|
GAAP net
income (loss)
|
(64.0)
|
20.0
|
|
Non-GAAP
adjusted net income
|
11.1
|
31.1
|
|
GAAP
diluted net income (loss) per share
|
(0.98)
|
0.26
|
|
Non-GAAP
adjusted diluted EPS
|
0.15
|
0.37
|
|
Non-GAAP Disclosures
The Company is reporting both GAAP net income (loss) and
non-GAAP adjusted results for the three months ended March 31, 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 expenses, (4) changes in contingent
consideration, (5) option amortization and (6) certain
non-recurring events, including asset impairments. 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 – In December 2012, we initiated a Phase 2b double
blind, multi-center, dose ranging study to evaluate the safety and
efficacy of subcutaneous administration of in combination with
Halozyme's recombinant human hyaluronidase enzyme (rHuPH20) in
adolescents and adults with HAE for prevention of HAE
attacks. We expect to complete enrollment in this study
during the first week of May, 2013.
- 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. To that end, we are supporting
investigator-initiated studies (IISs) evaluating C1 INH as a
treatment for patients with Neuromyelitis Optica (NMO) and
Autoimmune Hemolytic Anemia (AIHA); both of these studies were
initiated in 2012. We are also conducting a clinical trial in
Antibody-Mediated Rejection (AMR) post renal transplantation and
are evaluating the potential effect of C1-INH in Refractory
Paroxysmal Nocturnal Hemoglobinuria (PNH). ViroPharma plans to
continue to conduct both clinical and non-clinical studies to
evaluate additional therapeutic uses for its C1 INH product in the
future.
- 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. Additional data from these ongoing studies will be
provided during today's conference call.
- VP-20629 for Friedreich's Ataxia (FA) – We expect to
initiate a single and repeat dose phase 1 study in patients in
2013.
- Oral Budesonide for eosinophilic esophagitis (EOE) – We
currently have an exclusive option agreement to acquire Meritage
Pharma, Incorporated based on predefined terms 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 providing the following
update:
- Worldwide net product sales are expected to be
$440 to $465 million;
- Net North American Cinryze sales are expected to be
$390 to $400 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 on
May 1, 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 May 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, forecasted
future tax rates, our ability to continue to successfully
commercialize our products in the United
States and Europe, the
timing and results of anticipated events in our clinical
development programs; and our ability to identify and execute upon
business development opportunities.
Our actual results may vary depending on a variety of factors,
including:
- our ability to continue to identify and retain prophylaxis
Cinryze patients in the United
States and Europe at the
rate we anticipate, the total number of potential prophylaxis
Cinryze patients in the United
States and Europe and our
market share of HAE patients in the
United States and Europe;
- the size of the market, future growth potential and market
share for Buccolam and Plenadren in Europe;
- the availability of sufficient third party payer reimbursement
for each of our products in the United
States and Europe;
- fluctuations in wholesaler and SP 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, Buccolam and Plenadren;
- changes in prescribing or procedural practices of physicians,
including off-label prescribing of products competitive with
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 in the United States;
- 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
formulations, Cinryze for antibody mediated rejection, and
maribavir for treatment of CMV infections in transplant
recipients;
- whether we pursue regulatory approval of Plenadren in
the United States; 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 and our efforts to find a
partner for VP20621.
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 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 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. Clinical data presented regarding
studies with maribavir is interim data as the studies are ongoing.
There can be no assurance that the interim data is representative
of the final clinical data from the studies or that the results of
the studies will support future clinical studies of
maribavir. 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 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)
|
|
|
|
Consolidated Statements of
Operations:
|
Three
months ended
|
(in
thousands, except per share data)
|
March
31,
|
|
2013
|
|
2012
|
|
|
|
|
Revenues:
|
|
|
|
Net
product sales
|
$
107,149
|
|
$
135,800
|
|
|
|
|
Costs
and Expenses:
|
|
|
|
Cost of
sales (excluding amortization of product rights)
|
29,859
|
|
32,079
|
Research
and development
|
17,197
|
|
15,399
|
Selling,
general and administrative
|
42,724
|
|
37,949
|
Intangible
amortization
|
8,899
|
|
8,827
|
Impairment
loss
|
104,245
|
|
-
|
Other
operating expenses
|
2,084
|
|
1,236
|
Total costs and expenses
|
205,008
|
|
95,490
|
Operating income (loss)
|
(97,859)
|
|
40,310
|
|
|
|
|
Other
Income (Expense):
|
|
|
|
Interest
income
|
165
|
|
136
|
Interest
expense
|
(3,609)
|
|
(3,447)
|
Other
income (expense), net
|
(4,152)
|
|
1,061
|
Income
(loss) before income tax expense (benefit)
|
(105,455)
|
|
38,060
|
Income tax
expense (benefit)
|
(41,458)
|
|
18,069
|
Net income (loss)
|
$
(63,997)
|
|
$
19,991
|
|
|
|
|
Basic net
income (loss) per share
|
$
(0.98)
|
|
$
0.28
|
Diluted
net income (loss) per share
|
$
(0.98)
|
|
$
0.26
|
|
|
|
|
Shares
used in computing net income (loss) per share:
|
|
|
|
Basic
|
65,207
|
|
70,512
|
Diluted
|
65,207
|
|
85,026
|
VIROPHARMA INCORPORATED
|
|
|
|
Selected Financial Information
|
|
|
|
(unaudited)
|
|
|
|
Reconciliation of GAAP Net Income (Loss) to
Non-GAAP Adjusted Net Income
|
|
|
An
itemized reconciliation between net income (loss) and adjusted net
income on a non-GAAP basis is as follows:
|
(in
thousands)
|
Three
months ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
net income (loss)
|
$
(63,997)
|
|
$
19,991
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Non-cash
interest expense
|
2,409
|
|
2,245
|
|
|
|
|
Intangible
amortization
|
8,899
|
|
8,827
|
|
|
|
|
Share-based compensation
|
5,992
|
|
4,904
|
|
|
|
|
Option
amortization
|
1,084
|
|
1,071
|
|
|
|
|
Contingent
consideration expense
|
422
|
|
1,112
|
|
|
|
|
Asset
impairment
|
104,245
|
|
-
|
|
|
|
|
Tax effect
of the above
|
(47,990)
|
|
(7,082)
|
|
|
|
|
Non-GAAP
adjusted net income
|
$
11,064
|
|
$
31,068
|
|
|
|
|
|
|
|
|
|
|
|
|
Computation of Non-GAAP Adjusted Diluted Net
Income per Share
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjusted net income
|
$
11,064
|
|
$
31,068
|
|
|
|
|
Add
interest expense on senior
convertible notes, net of income tax
|
625
|
|
635
|
|
|
|
|
Non-GAAP
adjusted diluted net income
|
$
11,689
|
|
$
31,703
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
used in computing GAAP diluted
net income
(loss) per share
|
65,207
|
|
85,026
|
|
|
|
|
Shares
used in computing Non-GAAP
adjusted
diluted net income per share
|
79,147
|
|
85,026
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
diluted net income (loss) per share
|
$
(0.98)
|
|
$
0.26
|
|
|
|
|
Non-GAAP
adjusted diluted net income
per
share
|
$
0.15
|
|
$
0.37
|
|
|
|
|
Use of Non-GAAP Financial Measures
Our "non-GAAP adjusted net income" excludes the following items
from GAAP net income (loss):
- 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.
- 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.
- 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
|
(unaudited)
|
|
|
|
Selected Consolidated Balance Sheet
Data
|
|
March
31,
|
|
December
31,
|
(in
thousands)
|
|
2013
|
|
2012
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
199,197
|
|
$
175,518
|
Short-term
investments
|
|
61,607
|
|
71,338
|
Inventory
|
|
73,409
|
|
64,384
|
Total
current assets
|
|
456,829
|
|
453,418
|
Intangible
assets, net
|
|
503,529
|
|
617,539
|
Goodwill
|
|
96,361
|
|
96,759
|
Total
assets
|
|
1,107,917
|
|
1,219,952
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Total
current liabilities
|
|
$
100,660
|
|
$
114,028
|
Deferred
tax liabilities
|
|
123,357
|
|
167,484
|
Long-term
debt
|
|
163,968
|
|
161,793
|
Total
liabilities
|
|
407,381
|
|
462,913
|
Total
stockholders' equity
|
|
700,536
|
|
757,039
|
Total
liabilities and stockholders' equity
|
|
1,107,917
|
|
1,219,952
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
March
31,
|
|
March
31,
|
Statement of Cash Flows:
|
|
2013
|
|
2012
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
|
$
13,863
|
|
$
53,311
|
Net cash
provided by investing activities
|
|
8,643
|
|
17,894
|
Net cash
provided by (used in) financing activities
|
|
2,022
|
|
(39,611)
|
SOURCE ViroPharma Incorporated