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Pipeline Progresses at ViroPharma

Zacks Equity Research

ViroPharma Incorporated (VPHM) recently announced results from a phase II study of its candidate VP20621 (non-toxigenic Clostridium difficile), which is being developed to prevent recurrent C. difficile infections (CDI), a gastrointestinal infection.

The study (n=168) was conducted over 14 days wherein VP20621 was administered orally in adults previously treated for C. difficile- associated diarrhea (:CDAD)  with oral vancomycin or metronidazole.  The patients were given either placebo or VP20621 after they completed their antibiotic treatment to evaluate the tolerability of the latter.

Results from the study revealed statistically significant reductions in CDI recurrence in patients treated with VP20621 compared to those in the placebo arm. We note that at its inv day in Sep 2012, the company had designated VP20621 as a non-core asset. However, encouraged by the data, ViroPharma plans to seek a partner for the further development and subsequent commercialization of the candidate. We note that ViroPharma already has an approved drug, Vancocin indicated for the treatment of CDAD.

Hence, ViroPharma plans to complete the evaluation of the phase II data to determine the pathway for future development.

Nevertheless, ViroPharma also has maribavir in its pipeline, which is being developed for the treatment of cytomegalovirus (:CMV) infections in transplant recipients. Other candidates include VP20629, which is being developed for the treatment of Friedreich's Ataxia.

Meanwhile, the growth story for ViroPharma revolves around Cinryze, which is approved in the US for routine prophylaxis against angioedema attacks in adolescent and adult patients with hereditary angioedema (HAE). Cinryze accounted for 76% of total sales in 2012.

Although we are positive on the growth prospects of Cinrzye, we are concerned about the company’s increasing dependence on the same going forward.

ViroPharma currently carries a Zacks Rank #2 (Buy). Pharma stocks, which currently look more attractive, include Vertex Pharmaceuticals Incorporated (VRTX), UCB SA (UCBJF) and Alnylam Pharmaceuticals (ALNY). All three carry a Zacks Rank #1 (Strong Buy).


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