ViroPharma Inc. (VPHM) reported a net income of 7 cents in the third quarter of 2013, beating the Zacks Consensus Estimate by a penny. The company reported a loss of 3 cents per share in the year-ago quarter.
Quarterly revenues increased 24.2% year over year to $113.1 million, in line with the Zacks Consensus Estimate. The year-over-year growth in revenues was fuelled by strong growth of Cinryze in the U.S.
Cinryze sales increased 25% from the prior-year quarter to $107.0 million during the third quarter of 2013, driven by higher patient demand. Net sales in the US grew by 22% to $102.2 million. Sales from Europe came in at $10 million.
Research and development (R&D) expenses increased 9.3% during the quarter to $18.1 million.
Selling, general and administrative (SG&A) expenses amounted to $45.5 million, up 2.7% year over year.
2013 Outlook Updated
ViroPharma updated its guidance for 2013. The company now expects net product sales in the range of $445 million – $465 million compared to the previous estimate of $440 million - $465 million. The Zacks Consensus Estimate of $446 million is towards the lower end of the company’s guidance range.
The company now projects Cinryze sales of $395-$405 million in North America, up from the earlier projection of $390–$400 million. ViroPharma continues to expect combined R&D and SG&A expenses in the range of $240 – $260 million.
We note that ViroPharma has discontinued its phase II study on a subcutaneous version of Cinryze with partner Halozyme Therapeutics (HALO) earlier in 2013. The study was discontinued as a number of patients developed non-neutralizing anti-rHuPH20 antibodies.
Nevertheless, ViroPharma developed a low-volume subcutaneous formulation of Cinryze from this phase II study and is now evaluating this formulation in a phase I tolerability study. The company plans to meet with the U.S. Food and Drug Administration (:FDA) in the first quarter of 2014 to further discuss on initiation plans for a registration study in mid-2014.
Meanwhile, ViroPharma is evaluating maribavir in two phase II studies as a first line treatment of cytomegalovirus (:CMV) viremia as well as for the treatment of resistant/refractory CMV. The company expects to complete enrolment in these studies in the first half of 2014.
Moreover, ViroPharma also initiated a single and multiple oral dose safety and tolerability study on VP-20269 in patients in 2013 and expects completion of enrolment in the first half of 2014. The candidate is being studied for Friedreich's Ataxia (:FA).
We are encouraged by the third quarter results, which beat our expectations. We remind investors that the growth story for ViroPharma revolves around Cinrzye. Hence, the discontinuation of a phase II study on the label expansion of its key drug was a clear setback for the company. Nevertheless, we are positive on the company’s efforts to develop other candidates in its pipeline. We expect investor focus to remain on further updates on the same.