EXTON, Pa., Aug. 1, 2013 /PRNewswire/ -- VIROPHARMA
INCORPORATED (Nasdaq: VPHM) today announced financial results for
the second quarter of 2013. Net sales were $104 million for the second quarter ended
June 30, 2013 as compared to
$95 million in the comparative period
of 2012. The increase in net sales quarter over quarter was
driven by the commercial product growth of both Cinryze in
the U.S. and higher European product sales. During the second
quarter of 2013 U.S. Cinryze net sales grew by 22 percent over the
second quarter of 2012 to $91
million. The quarterly U.S. Cinryze sales reflect
$96 million of patient demand offset
by approximately $5 million of
wholesaler channel inventory drawdown. The patient demand
represents an increase of approximately $5
million from the $91 million
of patient demand reported in the first quarter of 2013.
"The second quarter of 2013 represented a period of strong
commercial execution coupled with significant progress in our
clinical development pipeline, despite this morning's news related
to our combination efforts with Halozyme," stated Vincent Milano, ViroPharma's chief executive
officer. "In addition to the positive maribavir interim data update
we shared last month and the continued advancement of enrollment in
the two studies, we also are approaching critical data milestones
heading into the second half of 2013, including our antibody
mediated rejection study with Cinryze in kidney transplant patients
and analysis of the completed subjects from the Cinryze
subcutaneous administration study which we updated this
morning."
Continued Milano, "On the commercial front, the continued growth
trajectory of U.S. Cinryze remains strong, with early signs of
positive impact from our sales force optimization and continued
progress with our European operations. Overall, we believe
ViroPharma is well positioned to continue generating growth and
strong momentum."
Our GAAP net income was $0.6
million in the second quarter of 2013 compared to a GAAP net
loss of $6 million in the second
quarter of 2012. GAAP diluted earnings per share was
$0.01 for the second quarter of 2013
compared to GAAP diluted loss per share of $0.08 for the same period in 2012.
Non-GAAP adjusted net income for the three months ended
June 30, 2013 was $11 million, compared to $5 million for the same period in 2012.
Non-GAAP adjusted diluted net earnings per share was $0.15 for the second quarter of 2013 compared to
$0.07 for the same period in
2012. A reconciliation between GAAP and non-GAAP adjusted
measures is provided in the Selected Financial Information –
Non-GAAP Financial Measures Reconciliation table included with this
release.
Operating Highlights
Cinryze global net sales during the second quarter of 2013 were
$95 million, a 23 percent increase
over the same period in 2012 driven by demand growth and net
realized price growth, partially offset by a reduction in channel
inventories. Vancocin net sales during the second quarter of
2013 were $4 million compared to
$16 million for the same period in
2012. During the second quarter of 2013, we generated net sales of
approximately $8 million from our
European operations compared to $4
million during the second quarter of 2012.
Cost of sales for the three months ended June 30, 2013 was flat as compared to the three
months ended June 30, 2012.
Research and development costs incurred during the second
quarter of 2013 were relatively flat compared to the same period in
2012 as advancements in our clinical development programs,
including the subcutaneous Cinryze and maribavir development
programs were offset by lower spending in our VP20621 program due
to the completion of our Phase 2 trial. The increase in selling,
general and administrative expenses for the second quarter of 2013
compared to the same period in 2012 was driven by the growth of our
global organization and our commercialization efforts.
We recognized a tax benefit of $0.8
million in the second quarter ended June 30, 2013 compared to a tax benefit of
$2.9 million in the second quarter
ended June 30, 2012.
Working Capital Highlights
At June 30, 2013, our working
capital was $379 million, which
included cash, cash equivalents and short term investments of
$259 million. During the first half
of 2013 we generated $9 million net
cash from operations.
Financial
Highlights ($ in millions, except per share data)
|
|
|
Q2
2013
|
Q2
2012
|
Percent
Change
|
Total net product
sales
|
$103.7
|
$94.6
|
+10%
|
Cinryze U.S. net
product sales
|
91.4
|
74.9
|
+22%
|
EU net product
sales
|
8.3
|
3.8
|
+118%
|
Vancocin net product
sales
|
4.0
|
15.9
|
-75%
|
GAAP net income
(loss)
|
0.6
|
(5.8)
|
|
Non-GAAP adjusted net
income
|
11.1
|
5.1
|
|
GAAP diluted net
income (loss) per
share
|
0.01
|
(0.08)
|
|
Non-GAAP adjusted
diluted EPS
|
0.15
|
0.07
|
|
Non-GAAP Disclosures
The Company is reporting both GAAP net income (loss) and
non-GAAP adjusted results for the three and six months ended
June 30, 2013 and 2012. Non-GAAP
adjusted net income is GAAP net income (loss) excluding (1)
non-cash interest expense, (2) amortization related to intangible
assets acquired, (3) share-based compensation expenses, (4) changes
in contingent consideration, (5) option amortization and (6)
certain non-recurring events, including impairment losses.
Non-GAAP adjusted diluted net income per share reflects the
Non-GAAP adjusted net income, after the incremental effect of
applying the "if converted" method of accounting to the senior
convertible notes, and the diluted shares used in determining our
GAAP diluted net income (loss) per share. A reconciliation
between GAAP and non-GAAP adjusted measures is provided in the
Selected Financial Information – Non-GAAP Financial Measures
Reconciliation table included with this release. The Company
believes that its presentation of historical non-GAAP financial
measures provides useful supplementary information to and
facilitates additional analysis by investors. These historical
non-GAAP financial measures are in addition to, not a substitute
for, or superior to, measures of financial performance prepared in
accordance with U.S. Generally Accepted Accounting Principles.
Research and Development Programs
ViroPharma is investing in research and development programs to
ensure growth for the future. The current pipeline includes
programs in various stages of clinical and pre-clinical development
focused on rare diseases and serious unmet medical needs.
- Subcutaneous administration of Cinryze – In December 2012, we initiated a Phase 2b double
blind, multi-center, dose ranging study to evaluate the safety and
efficacy of subcutaneous administration of Cinryze in combination
with Halozyme's recombinant human hyaluronidase enzyme (rHuPH20) in
adolescents and adults with HAE for prevention of HAE
attacks. Enrollment was completed into this study in May
2013. On August 1, 2013 due to
emergence of non-neutralizing antibodies to rHuPH20 in the ongoing
Phase 2 study, ViroPharma is discontinuing the study.
- New uses for C1 INH - We are investigating potential new
uses for our C1 esterase inhibitor product with a goal of pursuing
additional indications in patient populations with other C1 INH
mediated diseases. To that end, we are supporting
investigator-initiated studies (IISs) evaluating C1 INH as a
treatment for patients with Neuromyelitis Optica (NMO) and
Autoimmune Hemolytic Anemia (AIHA); both of these studies were
initiated in 2012. We've also completed enrollment into a clinical
trial in Antibody-Mediated Rejection (AMR) post renal
transplantation with data expected in the fourth quarter of 2013
and are also evaluating the potential effect of C1-INH in
Refractory Paroxysmal Nocturnal Hemoglobinuria (PNH). ViroPharma
plans to continue to conduct both clinical and non-clinical studies
to evaluate additional therapeutic uses for its C1 INH product in
the future.
- Maribavir for cytomegalovirus – We are currently
enrolling patients into a Phase 2 program to evaluate maribavir for
the treatment of CMV infections in transplant recipients. The
program consists of two independent Phase 2 clinical studies that
include subjects who have asymptomatic CMV in one trial, and those
who have failed therapy with other anti-CMV agents in another
trial. Interim data from these studies was presented in June
of 2013. The company expects to complete enrollment into both
studies in mid-2014.
- VP-20629 for Friedreich's Ataxia (FA) – We initiated a
single and multiple oral dose safety and tolerability study in
patients in 2013. The company anticipates completion of enrollment
in the first half of 2014.
- Oral Budesonide for eosinophilic esophagitis (EOE) – We
currently have an exclusive option agreement to acquire Meritage
Pharma, Incorporated based on predefined terms pending data
outcomes from a Phase 2 study and concurrence with the U.S. FDA on
an acceptable clinical endpoint for the Phase 3 program. The
Phase 2 study is currently enrolling with data expected in
2014.
2013 Guidance
ViroPharma is providing guidance for the year 2013 as a
convenience to investors. The following guidance provided by
ViroPharma are projections, based upon numerous assumptions, all of
which are subject to certain risks and uncertainties. For a
discussion of the risks and uncertainties associated with these
forward looking statements, please see the Disclosure Notice
below.
For the year 2013, ViroPharma is reiterating the
following:
- Worldwide net product sales are expected to be
$440 to $465 million;
- Net North American Cinryze sales are expected to be
$390 to $400 million; and
- Research and development (R&D) and selling, general and
administrative (SG&A) expenses are expected to be
$240 to $260 million.
Conference Call and Webcast
ViroPharma is hosting a live teleconference and webcast with
senior management to discuss the financial announcement, guidance,
and all other operational results of the first quarter and discuss
developments in the subcutaneous Cinryze clinical development
program on August 1, 2013 at
9:00 a.m. Eastern. To participate in
the conference call, please dial (800) 874-4559 (domestic) and
(302) 607-2019 (international). After placing the call,
please tell the operator you wish to join the ViroPharma investor
conference call.
Alternatively, the live webcast of the conference call can be
accessed via ViroPharma's website at
http://www.viropharma.com. Windows Media or Real Player will
be needed to access the webcast. An audio archive will be
available at the same address until August
15, 2013.
About ViroPharma Incorporated
ViroPharma Incorporated is an international biopharmaceutical
company committed to developing and commercializing novel solutions
for physician specialists to address unmet medical needs of
patients living with diseases that have few if any clinical
therapeutic options. ViroPharma is developing a portfolio of
therapeutics for rare and Orphan diseases including C1 esterase
inhibitor deficiency, cytomegalovirus (CMV), Friedreich's Ataxia,
eosinophilic esophagitis (EoE) and adrenal insufficiency. Our goal
is to provide rewarding careers to employees, to create new
standards of care in the way serious diseases are treated, and to
build international partnerships with the patients, advocates, and
health care professionals we serve. ViroPharma's commercial
products address diseases including hereditary angioedema (HAE),
seizures in children and adolescents, adrenal insufficiency and
C. difficile-associated diarrhea (CDAD). For full U.S.
prescribing information on our products, please download the
package inserts at http://www.viropharma.com/Products.aspx; the
prescribing information for other countries can be found at
www.viropharma.com.
ViroPharma routinely posts information, including press
releases, which may be important to investors in the investor
relations and media sections of our company's web site,
www.viropharma.com. The company encourages investors to consult
these sections for more information on ViroPharma and our
business.
Disclosure Notice
Certain statements in this press release contain forward-looking
statements that involve a number of risks and uncertainties.
Forward-looking statements provide our current expectations or
forecasts of future events. Forward looking statements in this
press release include our financial guidance for 2013, forecasted
future tax rates, our ability to continue to successfully
commercialize our products in the United
States and Europe, the
timing and results of anticipated events in our clinical
development programs, and our ability to identify and execute upon
business development opportunities.
Our actual results may vary depending on a variety of factors,
including:
- our ability to continue to identify and retain prophylaxis
Cinryze patients in the United
States and Europe at the
rate we anticipate, the total number of potential prophylaxis
Cinryze patients in the United
States and Europe and our
market share of HAE patients in the
United States and Europe;
- the size of the market, future growth potential and market
share for Buccolam and Plenadren in Europe;
- the availability of sufficient third party payer reimbursement
for each of our products in the United
States and Europe;
- fluctuations in wholesaler and SP order patterns and inventory
levels;
- competition from the approval of products which are currently
marketed for other indications by other companies or new
pharmaceuticals and technological advances to treat the conditions
addressed by Cinryze, Buccolam and Plenadren;
- changes in prescribing or procedural practices of physicians,
including off-label prescribing of products competitive with
Cinryze, Buccolam and Plenadren;
- manufacturing, supply or distribution interruptions, including
but not limited to our ability to acquire adequate supplies of
Cinryze and our other products in order to meet demand for each
product;
- our ability to receive regulatory approval for the use of
Cinryze for additional indications and routes of administration and
in additional territories in the timeframes we anticipate or at
all;
- the impact of healthcare reform legislation in the United States;
- actions by the FDA and EMA or other government regulatory
agencies;
- the timing and results of anticipated events in our clinical
development programs including studies with Cinryze subcutaneous
formulations, Cinryze for antibody mediated rejection, and
maribavir for treatment of CMV infections in transplant
recipients;
- whether we pursue regulatory approval of Plenadren in
the United States; and
- the timing and nature of potential business development
activities related to our efforts to expand our current portfolio
through in-licensing or other means of acquiring products in
clinical development or marketed products and our efforts to find a
partner for VP20621.
There can be no assurance that we will conduct additional
studies or that we will be successful in gaining regulatory
approval of Cinryze for additional indications, routes of
administration or in additional territories. Biologics such
as Cinryze require processing steps that are more difficult than
those required for most chemical pharmaceuticals, and as a result,
Sanquin, our manufacturer of Cinryze has received observations on
Form 483 which require us to continue to meet commitments made to
the FDA related to various manufacturing issues. In the event
Sanquin fails to meet these commitments, the FDA may take actions
that limit our ability to manufacture Cinryze. In the event Sanquin
is not able to manufacture the anticipated volume of product at the
industrial scale as a result of either FDA requirements, batch
failures, variability in batch yields, required maintenance or
other causes, we may not be able to satisfy patient demand or build
safety stock. Our inability to obtain adequate product supplies to
satisfy our patient demand may create opportunities for our
competitors and we will suffer a loss of potential future revenues.
Clinical data presented regarding studies with maribavir are
interim data as the studies are ongoing. There can be no assurance
that interim data will be representative of the final clinical data
from the studies or that the results of the studies will support
future clinical studies of maribavir. These factors, and
other factors, including, but not limited to those described in
ViroPharma's Annual report on Form 10-K for the year ended
December 31, 2012 and Quarterly
report on form 10-Q for the period ended March 31, 2013 could cause future results to
differ materially from the expectations expressed in this press
release. The forward-looking statements contained in this press
release may become outdated over time. ViroPharma does not assume
any responsibility for updating any forward-looking statements.
VIROPHARMA
INCORPORATED
|
Selected Financial
Information
|
|
(unaudited)
|
|
(unaudited)
|
Consolidated
Statements of Operations:
|
Three months
ended
|
|
Six months
ended
|
(in thousands, except
per share data)
|
June 30,
|
|
June 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Net product
sales
|
$
103,711
|
|
$
94,639
|
|
$
210,860
|
|
$
230,439
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Cost of sales
(excluding amortization of product
rights)
|
28,158
|
|
28,089
|
|
58,017
|
|
60,167
|
Research and
development
|
17,165
|
|
16,621
|
|
34,361
|
|
32,020
|
Selling, general and
administrative
|
46,235
|
|
40,883
|
|
88,958
|
|
79,046
|
Intangible
amortization
|
7,683
|
|
8,787
|
|
16,582
|
|
17,614
|
Impairment
loss
|
-
|
|
-
|
|
104,245
|
|
-
|
Other operating
expenses
|
684
|
|
858
|
|
2,767
|
|
2,054
|
Total costs and
expenses
|
99,925
|
|
95,238
|
|
304,930
|
|
190,901
|
Operating income
(loss)
|
3,786
|
|
(599)
|
|
(94,070)
|
|
39,538
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
Interest
income
|
153
|
|
142
|
|
319
|
|
278
|
Interest
expense
|
(3,681)
|
|
(3,518)
|
|
(7,290)
|
|
(6,965)
|
Other expense,
net
|
(493)
|
|
(4,783)
|
|
(4,648)
|
|
(3,548)
|
Income (loss) before
income tax expense (benefit)
|
(235)
|
|
(8,758)
|
|
(105,689)
|
|
29,303
|
Income tax expense
(benefit)
|
(833)
|
|
(2,928)
|
|
(42,291)
|
|
15,142
|
Net income
(loss)
|
$
598
|
|
$
(5,830)
|
|
$
(63,398)
|
|
$
14,161
|
|
|
|
|
|
|
|
|
Basic net
income (loss) per share
|
$
0.01
|
|
$
(0.08)
|
|
$
(0.97)
|
|
$
0.20
|
Diluted net
income (loss) per share
|
$
0.01
|
|
$
(0.08)
|
|
$
(0.97)
|
|
$
0.19
|
|
|
|
|
|
|
|
|
Shares used in
computing net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
65,355
|
|
69,390
|
|
65,281
|
|
69,951
|
Diluted
|
68,917
|
|
69,390
|
|
65,281
|
|
73,028
|
Selected Financial
Information
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Net Income (Loss) to Adjusted Non-GAAP Net
Income
|
|
|
An itemized
reconciliation between net income (loss) and adjusted
net
income on a non-GAAP
basis is as follows:
|
|
|
|
|
(in thousands, except
per share data)
|
Three months
ended
|
|
Six months
ended
|
|
June 30,
|
|
June 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
598
|
|
$
(5,830)
|
|
$
(63,398)
|
|
$
14,161
|
Adjustments:
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
2,481
|
|
2,312
|
|
4,890
|
|
4,557
|
Amortization
|
7,683
|
|
8,787
|
|
16,582
|
|
17,614
|
Share-based
compensation
|
6,291
|
|
5,457
|
|
12,286
|
|
10,360
|
Option
amortization
|
1,084
|
|
584
|
|
2,169
|
|
1,656
|
Contingent
consideration
|
(380)
|
|
734
|
|
42
|
|
1,846
|
Impairment
loss
|
-
|
|
-
|
|
104,245
|
|
-
|
Tax effect of the
above
|
(6,692)
|
|
(6,971)
|
|
(54,683)
|
|
(14,053)
|
Non-GAAP adjusted net
income
|
$
11,065
|
|
$
5,073
|
|
$
22,133
|
|
$
36,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computation of
Non-GAAP Adjusted Diluted Net Income per Share
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
income
|
$
11,065
|
|
$
5,073
|
|
$
22,133
|
|
$
36,141
|
Add interest expense
on senior
convertible notes,
net of income tax
|
625
|
|
634
|
|
1,251
|
|
1,269
|
Non-GAAP adjusted
diluted net income
|
$
11,690
|
|
$
5,707
|
|
$
23,384
|
|
$
37,410
|
|
|
|
|
|
|
|
|
Shares used in
computing GAAP diluted
net income (loss) per
share
|
68,917
|
|
69,390
|
|
65,281
|
|
73,028
|
Shares used in
computing Non-GAAP
adjusted diluted net
income per share
|
79,780
|
|
82,812
|
|
79,438
|
|
83,892
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
$
0.01
|
|
$
(0.08)
|
|
$
(0.97)
|
|
$
0.19
|
Non-GAAP adjusted
diluted net income
per share
|
$
0.15
|
|
$
0.07
|
|
$
0.29
|
|
$
0.45
|
Use of Non-GAAP Financial Measures
Our "non-GAAP adjusted net income" excludes the following items
from GAAP net income (loss):
1. Non-cash interest expense: Non-GAAP adjusted net income
excludes non-cash interest expense on our convertible notes.
We believe that excluding the non-cash portion of our
interest expense allows management and investors an alternative
view of our financial results "as if" our net income reflected only
the cash portion of our interest expense.
2. Purchase accounting and product acquisition related
adjustments: Non-GAAP adjusted net income excludes certain
items related to our acquisitions. The excluded items may include
among other adjustments; charges related to amortization of
intangible assets arising from acquisitions and changes in the fair
value of future contingent consideration or significant transaction
costs.
3. Share-based compensation expense: Non-GAAP adjusted net
income excludes the impact of our non-cash share-based compensation
expense. We believe that excluding the impact of expensing
share-based compensation better reflects the recurring economic
characteristics of our business.
Non-GAAP net income may exclude unusual or non-recurring items
that are evaluated on an individual basis. Our evaluation of
whether to exclude an item for purposes of determining our non-GAAP
financial measures considers both the quantitative and qualitative
aspects of the item, including, among other things (i) its size and
nature, (ii) whether or not it relates to our ongoing business
operations, and (iii) whether or not we expect it to occur as part
of our normal business on a regular basis. For purposes of
determining non-GAAP net income, items such as asset impairment or
upfront fees or milestone payments under license agreements, may be
excluded, among others, which will be evaluated on an individual
basis.
VIROPHARMA
INCORPORATED
|
Selected Financial
Information
|
|
|
|
|
|
|
Selected
Consolidated Balance Sheet Data
|
|
June 30,
|
|
December
31,
|
(in
thousands)
|
|
2013
|
|
2012
|
|
|
(unaudited)
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
191,398
|
|
$
175,518
|
Short-term
investments
|
|
67,335
|
|
71,338
|
Inventory
|
|
87,834
|
|
64,384
|
Total current
assets
|
|
468,527
|
|
453,418
|
Intangible assets,
net
|
|
494,392
|
|
617,539
|
Goodwill
|
|
96,264
|
|
96,759
|
Total
assets
|
|
1,113,106
|
|
1,219,952
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Total current
liabilities
|
|
$
89,763
|
|
$
114,028
|
Deferred tax
liabilities
|
|
120,050
|
|
167,484
|
Long-term
debt
|
|
166,205
|
|
161,793
|
Total
liabilities
|
|
403,328
|
|
462,913
|
Total stockholders'
equity
|
|
709,778
|
|
757,039
|
Total liabilities and
stockholders' equity
|
|
1,113,106
|
|
1,219,952
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
Statement of Cash
Flows:
|
|
2013
|
|
2012
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
9,258
|
|
$
74,878
|
Net cash provided by
investing activities
|
|
2,281
|
|
12,110
|
Net cash provided by
(used in) financing activities
|
|
4,666
|
|
(60,744)
|
SOURCE ViroPharma Incorporated