EXTON, Pa., May 1, 2012 /PRNewswire/ -- ViroPharma Incorporated (Nasdaq: VPHM) reported today its financial results for the first quarter ended March 31, 2012.
Since December 31, 2011, we:
- Achieved $136 million in quarterly net product sales, including $68 million in worldwide net sales of Cinryze® (C1 esterase inhibitor [human]), and $66 million in net sales of Vancocin® (Vancomycin Hydrochloride Capsules, USP);
- Responded to the FDA complete response letter regarding industrial scale manufacturing for Cinryze;
- Delivered positive cash flows from operations of $53 million;
- Finished the quarter with working capital of $532 million as of March 31, 2012, including cash, cash equivalents and short-term investments of $473 million;
- Attained non-GAAP adjusted net income of $31 million; GAAP net income reached $20 million;
- Repurchased an additional 1.6 million shares at a cost of approximately $50 million; and
- Presented positive data from our Phase 2 subcutaneous trial of Cinryze in combination with Halozyme’s recombinant human hyaluronidase enzyme (rhuPH20) technology.
Net sales were $135.8 million for the first quarter ended March 31, 2012, as compared to $127.0 million in the comparative period of 2011, representing 7 percent growth in the first quarter in net product sales. Regarding Cinryze, we used production and channel inventory to meet the growing demand during the first quarter. As a result, the channel was reduced by about a week to below normal levels. The company anticipates that the channel will remain below normal levels until product from industrial scale becomes available.
“We are a company that has the ability to withstand a challenge such as the recent FDA decision on Vancocin, and continue on our mission to provide life saving therapies to patients suffering from serious diseases,” stated Vincent Milano, ViroPharma’s chief executive officer. “In that respect, the first quarter of 2012 represented another strong quarter of impressive Cinryze demand growth, our European products are beginning to gain traction and our pipeline opportunities continue to advance.”
Our GAAP net income was $20.0 million in the first quarter of 2012 compared to $36.4 million in the first quarter of 2011. GAAP diluted earnings per share was $0.26 for the first quarter of 2012 compared to $0.40 for the same period in 2011.
Non-GAAP adjusted net income for the three months ended March 31, 2012 and 2011 was $31.1 million and $45.5 million, respectively, and non-GAAP adjusted diluted earnings per share was $0.37 for the first quarter of 2012 compared to $0.48 for the first quarter of 2011. 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 net sales during the three months ended March 31, 2012 were $68.2 million, a 21 percent increase over the respective period in 2011 due to an increase in the number of patients receiving Cinryze. Vancocin net sales during the three months ended March 31, 2012 were $66.2 million compared to $69.3 million in the first quarter of 2011, or a 4 percent decrease due to lower volume related to a milder flu season.
Cost of sales increased over the three month period in the prior year by $13.2 million primarily due to increased Cinryze volume coupled with lower Vancocin volumes and a royalty payment due on Vancocin sales. The increase in selling, general and administrative expenses of $9.6 million in 2012 compared to 2011 is primarily driven by the growth of our global organization and our European commercialization efforts. Research and development costs increased $5.0 million in 2012 compared to 2011 primarily due to advancement of our VP 20621 clinical program and our Cinryze and C1 esterase inhibitor programs. Other operating expense is mainly the mark-to-market of our contingent consideration liabilities related to our acquisitions.
The effective tax rate in the first quarter of 2012 was 47.5 percent compared to 39.7 percent in the first quarter of 2011. The increase in the tax rate results from the anticipated reduction in Vancocin revenues and its effect on U.S. profitability. In addition, the effective tax rate in both periods exceeded the federal statutory tax rate due to state income taxes and certain share-based compensation and other charges that are not tax deductible. We anticipate our effective tax rate to remain between 46 percent and 48 percent for the remainder of 2012 and that our effective tax rate will begin to decline in future years upon the generation of profits from our various overseas operations.
Working Capital Highlights
At March 31, 2012, our working capital was $531.5 million compared to $537.3 million at December 31, 2011. Operating cash flow was $53.3 million in the first quarter of 2012 compared to $39.1 million during the first quarter of 2011.
Looking ahead in 2012
ViroPharma is adjusting all but its U.S. Cinryze net sales guidance for the year 2012. 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 2012, ViroPharma expects the following:
- Worldwide net product sales are expected to be $450 to $500 million;
- Net U.S. Cinryze sales are expected to be $310 to $330 million; and
- Research and development (R&D) and selling, general and administrative (SG&A) expenses are expected to be $220 to $250 million.
Non-GAAP Disclosures
The Company is reporting both GAAP net income and non-GAAP adjusted net income for the three months ended March 31, 2012 and 2011. Non-GAAP adjusted net income is GAAP net income excluding (1) non-cash interest expense, (2) amortization related to 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 May 1, 2012 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 16, 2012.
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, Friedreich’s Ataxia, adrenal insufficiency; and recurrent C. difficile infection (CDI). 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 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.
