) third quarter 2012 adjusted earnings (including stock based
compensation) of 3 cents per share were slightly above the Zacks
Consensus Estimate of 2 cents but significantly lower than the
year-ago earnings of 51 cents. The earnings decline was primarily
attributable to lower revenues.
HALOZYME THERA (HALO): Free Stock Analysis
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VIROPHARMA (VPHM): Free Stock Analysis Report
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Quarterly revenues, which decreased 36.3% year over year to $91.0
million, missed the Zacks Consensus Estimate of $99 million. The
decline in revenue was primarily attributable to decreased
Vancocin sales due to generic competition.
Cinryze sales increased 9.3% from the prior-year quarter to $83.7
million during the reported quarter, driven by higher demand. We
note that ViroPharma has received US Food and Drug Administration
(FDA) approval of the Prior Approval Supplement (PAS) for
industrial scale manufacturing for Cinryze. This industrial scale
manufacturing will enable ViroPharma to increase Cinryze
In September 2012, the FDA informed ViroPharma that the company
may continue with its clinical studies of the subcutaneous
administration of Cinryze in combination with its partner,
) recombinant human hyaluronidase enzyme (rHuPH20). The company
plans to initiate a phase II study in the EU shortly. Data from
the study are expected to be release in 2013.
We note that Vancocin sales plummeted 95% to $4 million in the
reported quarter. The decline was attributable to the presence of
generic vancomycin capsules in the US market.
Research and development (R&D) expenses declined 27.8% during
the quarter to $16.5 million. However, the prior-year quarter
included a $3 million and $6.5 million payments to Halozyme and
), leading to the year-over-year R&D decline in the reported
quarter. R&D increased 23.1% after adjustment of the one-time
items. The increase was attributable to increased investment in
Cinryze, Maribavir and Plenadren programs.
Selling, general and administrative (SG&A) expenses amounted
to $44.3 million, up 41.3% from the prior-year quarter, due to
costs related to the launch of Cinryze, Buccolam and Plenadren.
During the third quarter of 2012, ViroPharma repurchased 3.1
million shares for $80 million. The company has authorized a $200
million extension of the stock repurchase program.
Following the third quarter results, ViroPharma revised its
guidance for 2012. The company has reduced its net product sales
guidance to $425-$435 million (previous guidance: $450-$475
million). The decreased guidance was primarily due to an
anticipated decrease in Vancocin revenues. The company maintained
its US Cinryze sales guidance of $320-$335 million.
Further, the company continues to expect combined R&D and
SG&A expenses in the range of $215-$235 million.
We currently have a Neutral recommendation on ViroPharma. The
stock carries a Zacks #3 Rank (Hold rating) in the short run.