(VPHM) is up about 60% this year and nearly half of that gain came
in one day last month when rumors were swirling about potential
buyout suitors. According to Bloomberg News, Sanofi (SNY) and Shire
(SHPG) have shown interest in acquiring ViroPharma.
Now that ViroPharma has earned a Zacks #1 Rank (Strong Buy), this
pullback to $37 looks even more interesting than just a bull flag
consolidation in the wake of the rumors.
We'll look at the analyst estimates and recent EPS beats that have
made VPHM a #1 in a moment, but first, here's the compelling chart
with that big green candle on September 13 worth 11.7 million
shares, which clearly indicates institutional accumulation...
Orphan Drug Specialist
ViroPharma develops and commercializes drugs specifically targeting
unmet medical needs with particular focus on orphan diseases, which
the FDA defines as rare conditions affecting less than 200,000
people, or that affect more than 200,000 persons but are not
expected to recover the costs of developing and marketing a
treatment drug. In essence, the FDA grants special "Orphan Drug
Designation" status to drugs and biologics targeting these
ViroPharma's key drugs include Cinryze for hereditary angioedema
(HAE), Plenadren for the treatment of adrenal insufficiency (AI),
Buccolam in Europe for the treatment of pediatric seizures, and
Vancocin for the treatment of C. difficile- associated diarrhea
ViroPharma's growth story currently revolves around Cinryze, which
is approved in the U.S. for routine prophylaxis against angioedema
attacks in adolescent and adult patients with HAE.
Cinryze accounted for 76% of total sales in 2012. In the EU,
Cinryze received approval for routine prevention, pre-procedure
prevention and acute treatment of angioedema attacks in adults and
adolescents in 2011.
Cinrzye has been granted marketing exclusivity by the U.S. Food and
Drug Administration (FDA) until 2015 under the Orphan Drug Act.
Meanwhile, an interesting candidate in ViroPharma's pipeline is
maribavir, being developed for the treatment of cytomegalovirus
(CMV) infections in transplant recipients. ViroPharma received
orphan drug designation in the EU for maribavir in June 2013 for
the treatment of CMV in patients suffering from impaired cell
Maribavir was granted the same designation in the U.S. in May 2011
for the treatment of clinically significant CMV and disease in
Back to Profitability
ViroPharma reports earnings Thursday October 24 before the market
opens and last week some analysts were bumping up their estimates
ahead of the event. These upward revisions, combined with recent
big positive surprises in the previous two quarters, have all eyes
set on the company's return to profitability next year.
While the company's pipeline, earnings momentum, and chart all look
good, Thursday's report could give large investors the confirmation
they need about ViroPharma. A move above all-time highs at $41 will
be the signal for many to keep accumulating shares.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs
Follow The Money
ISHARES NDQ BIO (IBB): ETF Research Reports
SHIRE PLC-ADR (SHPG): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
VIROPHARMA (VPHM): Free Stock Analysis Report
SPDR-HLTH CR (XLV): ETF Research Reports
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