ViroPharma Incorporated Reports Third Quarter 2011 Financial Results- Quarter Highlighted by Record Net Product Sales, European Launch of Cinryze® (C1 esterase inhibitor [human]) and European Approval of Buccolam® (midazolam, oromucosal solution) -
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Companies: Intellect Neurosciences, Inc. ViroPharma Inc.Topics: Earnings
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Press Release Source: ViroPharma Incorporated On Thursday October 27, 2011, 7:05 am EDT
EXTON, Pa., Oct. 27, 2011 /PRNewswire/ -- ViroPharma Incorporated (Nasdaq: VPHM - News) reported today its financial results for the third quarter ended September 30, 2011.
In the third quarter of 2011, we:
Achieved a record $143 million in net product sales, representing 21 percent growth over the third quarter of 2010;Recorded $65 million in net sales of Cinryze for the third quarter and $184 million for the 9 month period, representing Cinryze growth of 33 percent and 48 percent respectively, over the same periods in 2010;Realized non-GAAP adjusted net income of $48 million; GAAP net income reached $28 million;Generated net cash from operations of $53 million;Initiated a Phase 2 study to evaluate the safety, pharmacokinetics and pharmacodynamics of subcutaneous administration of Cinryze in combination with rHuPH20;Commenced the launch of Cinryze in Europe;Attained centralized European Pediatric Use Marketing Authorization (PUMA) for Buccolam for the treatment of prolonged, acute, convulsive seizures in infants, toddlers, children and adolescents from age 3 months to less than 18 years of age;Entered into a licensing agreement with Intellect Neurosciences, Inc. (OTCBB: ILNS.ob - News) to acquire the worldwide rights to the clinical stage drug candidate, OX1, being developed for the treatment of Friedreich's Ataxia;Repurchased an additional 5.5 million shares at a cost of approximately $98.9 million that substantially completed the $150 million securities repurchase program, and announced an additional $200 millionbuyback program;Maintained a working capital of $532 million as of September 30, 2011, including cash, cash equivalents and short-term investments of $460 million; andEntered into a $200 million, 3-year, senior secured, revolving credit facility.
"In all aspects of our business, I don't believe we have ever had a more productive period than the third quarter of 2011," commented Vincent Milano, ViroPharma's chief executive officer. "Commercially, Cinryze continued its success and growth in the U.S. market. Similarly, good progress was made in Europe, as we officially launched Cinryze in Germany and received centralized approval of Buccolam for treatment of convulsive seizures in children and adolescents. Our clinical development group made strong progress in advancing the Phase 2 studies of VP20621 and subcutaneous Cinryze in combination with PH20. Financially, we created flexibility to implement our long-range plan, improve our liquidity, and move quickly on new opportunities. The $150 million share buyback, $200 million extension, and credit facility moved us well along the path of addressing those needs. Finally, since our last reporting period, we were able to enter into two business development transactions, adding an early but promising rare disease pipeline candidate, and a European orphan drug which we believe is on the near term path to European Commission approval, both of which address important unmet medical needs."
Net sales were $143.0 million and $398.8 million for the three and nine months ended September 30, 2011, compared to $117.8 million and $317.4 million in the comparative periods of 2010, respectively. This represents a 21 percent increase for the three-month period and a 26 percent increase for the nine-month period.
Our GAAP net income was $28.2 million in the third quarter of 2011 compared to $38.3 million in the 2010 quarter. GAAP diluted earnings per share was $0.35 for the third quarter of 2011 compared to $0.45 for the same period in 2010. For the nine-month period in 2011, GAAP net income was $87.5 million compared to $88.1 million of GAAP net income during the first nine months in 2010. GAAP diluted earnings per share was $1.04 for the nine month periods in both 2011 and 2010.
Non-GAAP adjusted net income for the three and nine months ended September 30, 2011 was $48.4 million and$131.3 million, respectively, compared to $45.9 million and $110.6 million for the same periods in 2010. Non-GAAP adjusted diluted earnings per share was $0.56 for the third quarter of 2011 compared to $0.52 for the same period in 2010. Non-GAAP adjusted diluted earnings per share was $1.49 for the nine month period in 2011 compared to $1.25 for the nine month period in 2010. 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
Our net sales of Cinryze during the three and nine months ended September 30, 2011 increased to $65.4 millionand $184.5 million, respectively, from sales of $49.1 million and $124.3 million, respectively, during the same periods in the prior year due to the increase in the number of patients receiving commercial product. During the three months ended September 30, 2011, net sales of Vancocin were $76.6 million compared to $67.6 million in the same period in 2010 due to higher volume and net realized price growth. During the nine months endedSeptember 30, 2011, net sales of Vancocin increased to $211.1 million from $191.7 million in the same period in 2010 primarily due to net realized price growth.
The increase in selling, general and administrative expenses in both periods of 2011 compared to the same period of 2010 is driven by higher spending related to our European commercialization efforts and new Cinryze marketing programs. Research and development costs increased in both the three and nine month period of 2011 compared to the same period in 2010 primarily due to upfront licensing fees and milestone cost under our Halozyme and INS license agreements entered into during the year, which totaled $9.5 million in the three months and $18.5 million in the nine months ended September 30, 2011.
We also incurred other operating expenses of approximately $10.9 million and $16.9 million during the three and nine months ended September 30, 2011 respectively, including costs to expand Cinryze manufacturing capacity at Sanquin and the increase in the fair value of the contingent consideration related to the acquisition of Buccolam and an $8.5 million impairment charge as a result of the decision to push out development and commercialization plans for the remaining Auralis in-process research and development asset.
Working Capital Highlights
At September 30, 2011, our working capital was $531.6 million compared to $561.0 million at the end of 2010 as we generated $121.6 million in cash flow from operations during the first nine months of 2011, offset by the$148.9 million cash outlay used to repurchase 8.2 million shares during the nine months of 2011.
Looking ahead in 2011
ViroPharma is updating its guidance for the year 2011 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 ending December 31, 2011, ViroPharma expects the following:
Net Cinryze sales are expected to be between $250 and $260 million.
Research and development (R&D) and selling, general and administrative (SG&A) expenses are expected to be between $185 and $195 million. This increase is a result of the addition of the $6.5 millionupfront payment related to the licensing of OX1.
Non-GAAP Disclosures
The Company is reporting both GAAP net income and earnings per share and non-GAAP adjusted results for the three and nine month periods ended September 30, 2011. Non-GAAP adjusted net income is GAAP net income excluding (1) non-cash interest expense, (2) amortization related intangible assets acquired, (3) stock compensation expenses, and (4) certain non-recurring events. 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 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.
Conference Call and Webcast
ViroPharma is hosting a live teleconference and webcast with senior management to discuss the financial announcement, guidance, and other business results on October 27, 2011 at 8:00 a.m. Eastern. To participate in the conference call, please dial (888) 299-4099 (domestic) and (302) 709-8337 (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 athttp://us.lrd.yahoo.com/_ylt=ApH43qnP_O.D9iBYD6nI2rmxcq9_;_ylu=X3oDMTE2MGFtajlwBHBvcwMzBHNlYwNuZXdzYXJ0Ym9keQRzbGsDaHR0cHd3d3Zpcm9w/SIG=11e5405pl/EXP=1320946584/**http%3A//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 November 18, 2011. |
