VPHM Viropharma Incorporated (MM)

ViroPharma Inc.’s ( VPHM ) first quarter 2013 adjusted loss (excluding special items but including stock-based compensation) came in at 7 cents per share compared to year-ago earnings of 18 cents. The Zacks Consensus Estimate was 4 cents. The year-over-year earnings decline was primarily due to lower revenues.

Quarterly revenues, which decreased 21.8% year over year to $107.1 million, were marginally short of the Zacks Consensus Estimate of $108 million. The decline in revenues was primarily due to decreased Vancocin sales in the face of generic competition, which was partially offset by growth in Cinryze sales.

Quarterly Highlights

Cinryze sales increased 46% from the prior-year quarter to $99.5 million during the first quarter of 2013, driven by higher demand. Net sales in the US net sales grew by 44% $97 million. Of the total sales, approximately $91 million was attributed to patient demand while the remaining represented additional inventory in the channel.

Sales from Europe came in at $7 million, up 152% year over year. Cinryze accounted for $2.7 million, Buccolam $2.5 million and Plenadren accounted for $0.4 million. 

On the other hand, Vancocin net sales plummeted 93.9% in the quarter to $4.0 million. The decline was attributable to the entry of generic versions of the drug in the US market in Apr 2012.

Research and development (R&D) expenses increased 11.7% during the quarter to $17.2 million. The increase was attributable to ViroPharma’s efforts to develop its pipeline.

Selling, general and administrative (SG&A) expenses amounted to $42.7 million, up 12.6% due to costs related to the launch of Cinryze and Buccolam in the EU and additional Cinryze commercialization costs in the US.

2013 Outlook Lowered

ViroPharma lowered its guidance for 2013. The company now expects net product sales in a range of $440 million – $465 million, down from the earlier projection of $450 – $475 million. The Zacks Consensus Estimate of $463 million is within the company’s guidance range.

Nevertheless, the company maintained its US Cinryze sales guidance of $390–$400 million. Further, ViroPharma continues to expect combined R&D and SG&A expenses in the range of $240 – $260 million.

ViroPharma is also upbeat about its pipeline. The company and partner Halozyme Therapeutics (HALO) initiated a phase IIb study in late Dec 2012 to evaluate the safety and efficacy of a subcutaneous version of Cinryze. The company expects to complete enrollment shortly. ViroPharma is also developing other pipeline candidates such as maribavir.

ViroPharma carries a Zacks Rank #3 (Hold). Right now, stocks which look well placed include UCB SA (UCBJF) and Onyx Pharmaceuticals, Inc. (ONXX). Both stocks carry a Zacks Rank #1 (Strong Buy).

 
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