ViroPharma Inc. (VPHM) reported a net income of a penny in the second quarter of 2013 compared to a loss of 6 cents per share in the year-ago quarter. The Zacks Consensus Estimate was 2 cents per share.
Quarterly revenues, which increased 9.5% year over year to $103.7 million, were marginally short of the Zacks Consensus Estimate of $105 million. The year-over-year growth in revenues was fuelled by Cinryze in the U.S. and higher product sales in Europe.
Cinryze sales increased 23% from the prior-year quarter to $95.0 million during the second quarter of 2013, driven by higher demand and price growth.
Net sales in the US grew by 22% to $91.4 million. Of the total sales, approximately $96 million was attributed to patient demand, which was partially offset by $5 million of drawdown in wholesaler channel inventory.
On the other hand, Vancocin net sales plummeted 75.0% in the quarter to $4.0 million. The decline was attributable to the entry of generic versions of the drug in the U.S. in Apr 2012.
Sales from Europe doubled year over year to $8 million.
Research and development (R&D) expenses increased 3.2% during the quarter to $17.2 million. The increase was attributable to ViroPharma’s efforts to develop its pipeline including the subcutaneous formulation of Cinryze and maribavir.
Selling, general and administrative (SG&A) expenses amounted to $46.2 million, up 13.1% year over year.
2013 Outlook Reiterated
ViroPharma reiterated its guidance for 2013. The company continues to expect net product sales in the range of $440 million – $465 million. The Zacks Consensus Estimate of $449 million is within the company’s guidance range.
The company projects U.S. Cinryze sales of $390–$400 million. Further, ViroPharma continues to expect combined R&D and SG&A expenses in the range of $240 – $260 million.
Concurrent with second-quarter results, ViroPharma announced that it is discontinuing its phase II study on a subcutaneous version of Cinryze with partner Halozyme Therapeutics (HALO). 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 plans to evaluate the same in a subsequent phase III study.
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 mid 2014.
We were disappointed by the second quarter results, which missed 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 is a clear setback for the company. We expect investor focus to remain on further updates on the same.
Shares reacted negatively to the news and lost 6.76% thereafter.
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