EXTON, Pa., May 1, 2013 /PRNewswire/ -- ViroPharma Incorporated (Nasdaq: VPHM) today announced financial results for the first quarter of 2013. Net sales were $107 million for the first quarter ended March 31, 2013 as compared to $136 million in the comparative period of 2012. The decline in net sales quarter over quarter was driven by the decrease in Vancocin revenues partially offset by commercial product growth for Cinryze. The first quarter 2013 U.S. Cinryze net sales which grew by 44 percent over the first quarter of 2012 to $97 million, including approximately $91 million of patient demand. The balance represented additional inventory in the channel.
"The early part of 2013 has seen great progress both in our commercial business as well as our development pipeline," stated Vincent Milano, ViroPharma's chief executive officer. "In addition to the virologic response data we will share during our conference call today from subjects enrolled into our two maribavir studies, we also expect results from several key programs for Cinryze in the coming quarters such as subcutaneous Cinryze administration, antibody-mediated rejection (AMR) in kidney transplant, new uses for C1 INH, as well as additional progress updates with maribavir."
Our GAAP net loss was $64 million in the first quarter of 2013 compared to net income of $20 million in the first quarter of 2012. GAAP diluted net loss per share was $(0.98) for the first quarter of 2013 compared to GAAP diluted earnings per share of $0.26 for the same period in 2012. The loss for the quarter was driven by a $104 million non-cash impairment charge related to the Vancocin intangible asset due to rapid decline in market price of generic vancomycin. Also driving the quarter over quarter decrease was the loss of Vancocin revenues partially offset by the continued growth of Cinryze.
Non-GAAP adjusted net income for the three months ended March 31, 2013 was $11 million, compared to $31 million for the same period in 2012. Non-GAAP adjusted diluted net earnings per share was $0.15 for the first quarter of 2013 compared to $0.37 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 HighlightsCinryze net sales during the first quarter of 2013 were $99.5 million, a 46 percent increase over the same period in 2012 driven by demand growth, rebuilding channel inventories and net realized price growth. Vancocin net sales during the three months were $4 million compared to $66 million for the same period in 2012. The decrease is due to the impact of the launch of generic versions of vancomycin in April of 2012. During the first quarter of 2013, we generated net sales of approximately $7 million from our European operations.
Cost of sales decreased for the three months ended March 31, 2013 as compared to the three months ended March 31, 2012 by $2 million. The decrease in cost of sales was due to product mix and overall sales decline of Vancocin compared to the same period in the prior year. We anticipate that our cost of sales, on a relative basis, will remain higher than historical levels due to the introduction of generic vancomycin and the reduction of our sales of Vancocin relative to our Cinryze sales along with the royalty due to Genzyme on Vancocin-related sales.
Research and development costs incurred during the first quarter of 2013 increased compared to the same period in 2012 due to advancements in our clinical development programs, including the subcutaneous Cinryze and maribavir development programs, among others. The increase in selling, general and administrative expenses for the first quarter of 2013 compared to the same period in 2012 was driven by the growth of our global organization and our European commercialization efforts.
Because our Vancocin intangible asset is amortizable for tax purposes, we recorded a tax benefit of $41 million related to the impairment of the asset. We recognized a total tax benefit of $42 million in the quarter ended March 31, 2013 compared to a tax expense of $18 million in the quarter ended March 31, 2012.
Working Capital HighlightsAt March 31, 2013, our working capital was $356 million, which included cash, cash equivalents and short term investments of $261 million. During the first quarter of 2013 we generated $14 million net cash from operations. Financial Highlights ($ in millions, except per share data)Q1 2013Q1 2012PercentChangeTotal net product sales
-21%Cinryze U.S. net product sales
+44%EU net product sales
+152%Vancocin net product sales
-95%GAAP net income (loss)
20.0Non-GAAP adjusted net income
31.1GAAP diluted net income (loss) per share
0.26Non-GAAP adjusted diluted EPS
0.37Non-GAAP DisclosuresThe Company is reporting both GAAP net income (loss) and non-GAAP adjusted results for the three months ended March 31, 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 asset impairments. 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 ProgramsViroPharma 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.
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 providing the following update:
Conference Call and WebcastViroPharma 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 on May 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 May 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:
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. The entry of competing generic products following FDA approval in April 2012 has and will continue to significantly affect our sales of Vancocin and our financial performance. 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 is interim data as the studies are ongoing. There can be no assurance that the interim data is 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 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.
VIROHARMA INCORPORATEDSelected Financial Information(unaudited)Consolidated Statements of Operations:Three months ended(in thousands, except per share data)
March 31,20132012Revenues:Net product sales
35,800Costs and Expenses:Cost of sales (excluding amortization of product rights)
29,85932,079Research and development
17,19715,399Selling, general and administrative
104,245-Other operating expenses
2,0841,236Total costs and expenses
205,00895,490Operating income (loss)
(97,859)40,310Other Income (Expense):Interest income
(3,609)(3,447)Other income (expense), net
(4,152)1,061Income (loss) before income tax expense (benefit)
(105,455)38,060Income tax expense (benefit)
(41,458)18,069Net income (loss)
9,991Basic net income (loss) per share
.28Diluted net income (loss) per share
.26Shares used in computing net income (loss) per share:Basic
65,20785,026VIROPHARMA INCORPORATEDSelected Financial Information(unaudited)Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net IncomeAn itemized reconciliation between net income (loss) and adjusted net income on a non-GAAP basis is as follows:(in thousands)
Three months endedMarch 31,20132012GAAP net income (loss)
9,991Adjustments:Non-cash interest expense
1,0841,071Contingent consideration expense
104,245-Tax effect of the above
(47,990)(7,082)Non-GAAP adjusted net income
31,068Computation of Non-GAAP Adjusted Diluted Net Income per ShareNon-GAAP adjusted net income
31,068Add interest expense on senior
convertible notes, net of income tax
625635Non-GAAP adjusted diluted net income
31,703Shares used in computing GAAP diluted
net income (loss) per share
65,20785,026Shares used in computing Non-GAAP
adjusted diluted net income per share
79,14785,026GAAP diluted net income (loss) per share
.26Non-GAAP adjusted diluted net income
Use of Non-GAAP Financial Measures Our "non-GAAP adjusted net income" excludes the following items from GAAP net income (loss):
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.
VIROHARMA INCORPORATEDSelected Financial Information(unaudited)Selected Consolidated Balance Sheet DataMarch 31,December 31,(in thousands) 20132012AssetsCurrent assets:Cash and cash equivalents$
75,518Short-term investments61,60771,338Inventory73,40964,384Total current assets456,829453,418Intangible assets, net503,529617,539Goodwill96,36196,759Total assets1,107,9171,219,952Liabilities and Stockholders' EquityTotal current liabilities$
4,028Deferred tax liabilities123,357167,484Long-term debt163,968161,793Total liabilities407,381462,913Total stockholders' equity700,536757,039Total liabilities and stockholders' equity1,107,9171,219,952 Three months ended March 31,March 31,Statement of Cash Flows:20132012(in thousands)Net cash provided by operating activities$
53,311Net cash provided by investing activities8,64317,894Net cash provided by (used in) financing activities2,022(39,611)
|SOURCE ViroPharma Incorporated|
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