ViroPharma article mentions ILNS in promising pipeline: Anyone see this published 2 days ago??? Positive plug for ILNS and pipeline, clinical trial comments!
The company has seven different pipeline programs (inclusive of the subcutaneous dosing of Cinryze discussed earlier). VP20621, which ViroPharma acquired in 2006, is the company’s drug for the treatment of recurrent C. difficile. A Phase II trial was begun in May 2011, and the company projects that full Phase II data will be available in 2013. VP20629 is licensed from Intellect Neurosciences for the treatment of Friedreich’s Ataxia (FA), a rare neurodegenerative disease that affects about 1 in 50,000 people. Symptoms of FA include heart disease, speech problems, and gait disturbance. It is estimated that there are 6,000 FA patients here in the United States. Phase I data for VP20629 showed that the drug was well-tolerated at all dose levels, and ViroPharma is set to initiate a Phase II trial in the second half of 2013, and the company plans to file for orphan drug status once Phase II data is available. ViroPharma will pay Intellect Neurosciences up to $120 million in milestones, as well as a tiered royalty rate (with a cap in the “mid-teens”), if VP20629 is approved and commercialized.
ViroPharma stands out in the biotechnology industry because it is actively buying back stock, a rarity for most companies in the sector. While it is normal for companies such as Amgen or Celgene to be buying back stock, companies of ViroPharma’s size are not usually active repurchasers. In the first 9 months of 2012, ViroPharma spent $151.985 million on share buybacks, which retired 5.8 million shares of stock (the company currently has 65,208,904 shares outstanding). On the company’s earnings call, analysts pressed ViroPharma’s executives about why the company is buying back stock when those funds can be used to acquire new pipeline assets. CEO Vincent Milano responded:
The strategy [regarding capital deployment] remains consistent, we constantly evaluate business development opportunities, versus internal opportunities, versus the opportunity to further improve our capital structure with buyback. So I would say that today, our strategy remains the same as it has been. We’ll continue to consider all of those things and deploy the capital at the times we see fit, that way we see fit. So nothing’s changed. Maybe more specifically on the business development question, we have a very robust pipeline. As I think we had a chance to at least share a reasonable portion of that with the investment community on the 21st of September. So we’re not necessarily thinking only about filling the pipeline, we’re still interested in other commercial products, specifically in the United States would be good. As you know, our team in Europe is extremely busy launching 3 products. But we’re not exclusively looking one way or the other. We’re actually continuing to look at it all.
Cowen & Company analyst Phil Nadeau asked CEO Vincent Milano why the company is buying back stock if, “It doesn’t seem like for the next couple of years your stock’s going to be valued on an EPS basis; It’s more on top line growth.” Nadeau sees little reason to spend money to buy back stock if the market does not care about EPS, but rather how quickly ViroPharma can grow its sales and completely mitigate the effects of generic Vancocin, and he believes that more cash on the balance sheet allows for even greater “flexibility” in acquiring promising clinical programs.