EXTON, Pa., Aug. 12, 2002 (PRIMEZONE) -- ViroPharma Incorporated (Nasdaq:VPHM) reported today financial results for the second quarter ended June 30, 2002.
For the quarter ended June 30, 2002, ViroPharma reported a net loss allocable to common stockholders of $16.8 million compared to a net loss allocable to common stockholders of $11.8 million for the same period in 2001. Net loss for the quarter ended June 30, 2001 was adjusted to reflect preferred stock dividends to arrive at net loss allocable to common stockholders. Net loss per share allocable to common stockholders for the quarter ended June 30, 2002 was $0.74 per share, basic and diluted, compared to $0.67 per share, basic and diluted for the same period in 2001.
Revenues were approximately $7.3 million for the quarter ended June 30, 2002, compared to approximately $0.3 million during the same period in 2001. During the quarter ended June 30, 2002, ViroPharma earned detailing fees of approximately $6.8 million for promoting Nasacort(r) AQ and Allegra(r), two products owned by Aventis Pharmaceuticals Inc. During the quarter ended June 30, 2002, ViroPharma also recognized deferred revenue of approximately $0.5 million from advance payments received under our collaborations with Wyeth and Aventis, compared to recognizing deferred revenue of approximately $0.3 million from advance payments received under ViroPharma's collaboration agreement with Wyeth during the same period in 2001. ViroPharma will not earn detailing fees beyond August 31, 2002.
Research and development expenses increased to $10.3 million in the second quarter of 2002 from $6.9 million in the second quarter of 2001. This increase of approximately $3.4 million was due to a $2.1 million increase in manufacturing costs related to Picovir(tm), a $1.7 million increase in development expenses arising from ViroPharma's Picovir(tm) and RSV programs and a $0.8 million increase in discovery research expenses. Partially offsetting these expenses was an approximately $0.9 million increase in amounts to be reimbursed to ViroPharma for the quarter ended June 30, 2002 compared to the quarter ended June 30, 2001 as a result of the company's collaboration agreement with Aventis, and approximately $0.3 million in lower employee-related costs.
Sales and marketing expenditures during the second quarter of 2002 were approximately $2.7 million, net of detailing fee revenue of $6.8 million. Aggregate sales and marketing expenses for the second quarter of 2002 were approximately $9.5 million, which is net of Aventis cost sharing of approximately $1.1 million, compared to approximately $2.6 million for the same period of 2001. This increase reflects ViroPharma's 45% portion of the investments in pre-launch activities for Picovir(tm), including medical education, brand development and market research and the costs of our sales organization.
General and administrative expenses for the second quarter of 2002 of approximately $2.8 million increased slightly when compared to the $2.6 million from the same period in 2001. The increase of approximately $0.2 million is primarily due to higher facilities and legal costs associated with the Company's ongoing litigation.
Interest expense for the quarter ended June 30, 2002 was essentially flat when compared to the same period in the prior year due to relatively consistent levels of debt in both periods. Interest income fell approximately $1.7 million during the second quarter of 2002 when compared to the same quarter in 2001 primarily due to lower effective yields on investments due to the relatively lower interest rate environment during the current quarter versus the same quarter in the prior year.
As of June 30, 2002 ViroPharma had approximately $201 million in cash, cash equivalents and short-term investments.
For the six-months ended June 30, 2002, ViroPharma reported a net loss allocable to common stockholders of $38.2 million compared to a net loss allocable to common stockholders of $41.1 million for the same period in 2001. Net loss for the six-months ended June 30, 2001 was adjusted to reflect preferred stock dividends to arrive at net loss allocable to common stockholders. Net loss per share allocable to common stockholders for the six-months ended June 30, 2002 was $1.69 per share, basic and diluted, compared to $2.47 per share, basic and diluted, for the same period in 2001.
Revenues were approximately $13.8 million for the six months ended June 30, 2002, compared to approximately $2.5 million during the same period in 2001. During the six months ended June 30, 2002, ViroPharma earned detailing fees of approximately $12.7 million for promoting Nasacort(r) AQ and Allegra(r), two products owned by Aventis Pharmaceuticals Inc. During the six months ended June 30, 2002, ViroPharma also recognized deferred revenue of approximately $1.1 million from advance payments received under our collaborations with Wyeth and Aventis, compared to recognizing deferred revenue of approximately $0.5 million from advance payments received under ViroPharma's collaboration agreement with Wyeth during the same period in 2001. In the six-month period ended June 30, 2002 the company did not earn any milestone revenue compared to $2 million in milestone revenues earned during the period ending June 30, 2001.
Research and development expenses increased to $23.8 million for the six-month period ended June 30, 2002 from $18.7 million for the six-month period ended June 30, 2001. This increase of approximately $5.1 million was due to a $3.4 million increase in manufacturing costs related to Picovir(tm), a $1.5 million increase in development expenses arising from ViroPharma's Picovir(tm) and RSV programs, a $1.7 million increase in discovery research costs, and approximately $1.5 million in higher employee-related costs. Partially offsetting these expenses was an approximately $3.0 million increase in amounts to be reimbursed to ViroPharma for the six months ended June 30, 2002 compared to the six months ended June 30, 2001, primarily as a result of the company's collaboration agreement with Aventis.
Sales and marketing expenditures during the six months ended June 30, 2002 were approximately $8 million, net of detailing fee revenue of $12.7 million. Aggregate sales and marketing expenses for the six-months ended June 30, 2002 were approximately $20.7 million, which is net of Aventis cost sharing of approximately $1.4 million, compared to approximately $3.9 million for the same period of 2001. This increase reflects ViroPharma's 45% portion of the investments in pre-launch activities for Picovir(tm), including medical education, brand development and market research and the costs of the company's sales organization.
General and administrative expenses increased to $5.2 million in the six-months ended June 30, 2002 from $4.9 million for the same period of 2001. The increase of approximately $0.3 million is primarily due higher facilities and legal costs associated with the Company's ongoing litigation.
Included in operating expenses in the six-month period ended June 30, 2001 is a non-cash charge of $16.5 million resulting from the issuance of 750,000 shares of common stock to Sanofi-Synthelabo in exchange for the expansion of ViroPharma's intellectual property rights related to Picovir(tm), as these additional intellectual property rights licensed from Sanofi-Synthelabo have not reached technological feasibility and have no alternative uses.
Interest expense for the six months ended June 30, 2002 was essentially flat when compared to the same period in the prior year due to relatively consistent levels of debt in both periods. Interest income fell approximately $3.0 million during the first six months of 2002 when compared to the same period in 2001 primarily due to lower effective yields on investments due to the relatively lower interest rate environment during the current six-month period versus the same period in the prior year.
Subsequent Events
Corporate Restructuring
In August 2002, ViroPharma announced that it restructured its organization. As part of this process, the company reduced its workforce by approximately 63%, which includes selling its sales force to Aventis Pharmaceuticals Inc. and reductions in development, commercial operations and administration. ViroPharma and Aventis have agreed to terminate their agreement regarding Picovir(tm). ViroPharma does not intend to fund any additional significant clinical development of Picovir(tm) for the treatment of the common cold without a new partner. ViroPharma expects to record a one-time restructuring charge of approximately $4 million in the third quarter of 2002.
Collaboration with Aventis
In August 2002, ViroPharma announced that ViroPharma and Aventis mutually agreed to end their collaboration to co-develop and co-promote Picovir(tm). Under the agreement, Aventis returned Picovir(tm) to ViroPharma, and both parties received mutual releases of all obligations without incurring termination fees. Aventis will compensate ViroPharma for Aventis' current share of development and commercial expenses and our detailing fees through August, and ViroPharma returned to Aventis advance milestone payments of $20 million. Aventis also purchased 3 million shares of the company's common stock for $4.59 million.
In a separate transaction, Aventis will acquire ViroPharma's sales force, which totals nearly 200 people, for a payment to ViroPharma of $15.41 million. The sales force currently promotes products from the Aventis respiratory portfolio -- Nasacort(r) AQ and the Allegra(r) family, and will continue to do so after the transfer, which is expected by early September 2002.
The company expects to record income of approximately $19.4 million in the third quarter in connection with these events. ViroPharma will not continue to earn detailing fees for periods following the transfer of its sales force or receive additional cost reimbursements for periods after July 31, 2002.
About ViroPharma Incorporated
ViroPharma Incorporated is committed to the commercialization, development and discovery of antiviral pharmaceuticals. ViroPharma is focused on drug development and discovery activities in viral diseases including hepatitis C and RSV disease. The company is also exploring alternatives regarding the future development of Picovir for the treatment of diseases caused by picornaviruses.
Statements in this press release relating to our estimate of the income that we expect to record in the third quarter of 2002 in connection with the termination of our collaboration agreement with Aventis and the transfer of our sales force, and our estimation of the restructuring charge that we expect to record in the third quarter, are forward-looking and subject to risks and uncertainties. There can be no assurance that the income that we actually record in the third quarter of 2002 in connection with the termination of our collaboration agreement with Aventis and the transfer of our sales force to Aventis will reflect our anticipated income arising from these events. There can be no assurance that the restructuring charge that we actually record in the third quarter of 2002 will reflect our anticipated restructuring charge. In addition, in the future, we may not be able to maintain our listing on the Nasdaq Stock Market. These factors, and other factors, including, but not limited to those described in ViroPharma's most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission, 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.
VIROPHARMA INCORPORATED
Selected Financial Information
(Unaudited)
Consolidated Statements of Operations:
(in thousands, except per share data)
Three-months ended Six-months ended
June 30, June 30,
2001 2002 2001 2002
-------- -------- -------- --------
Revenue $ 250 $ 7,291 $ 2,500 $ 13,813
-------- -------- -------- --------
Operating expenses:
Research and development 6,897 10,328 18,736 23,849
Acquisition of
technology rights -- -- 16,500 --
Sales and marketing 2,607 9,474 3,887 20,720
General and administrative 2,602 2,787 4,929 5,224
-------- -------- -------- --------
Total operating expenses 12,106 22,589 44,052 49,793
-------- -------- -------- --------
Interest income 3,138 1,446 6,545 3,562
Interest expense 2,914 2,909 5,794 5,820
-------- -------- -------- --------
Net loss $(11,632) $(16,761) $(40,801) $(38,238)
======== ======== ======== ========
Net loss allocable to
common stockholders $(11,795) $(16,761) $(41,146) $(38,238)
======== ======== ======== ========
Net loss per share:
basic and diluted $ (0.66) $ (0.74) $ (2.45) $ (1.69)
Net loss per share allocable
to common stockholders:
basic and diluted $ (0.67) $ (0.74) $ (2.47) $ (1.69)
Shares used in computing net
loss per share allocable
to common stockholders:
basic and diluted 17,624 22,702 16,649 22,689
======== ======== ======== ========
Consolidated Balance Sheet Data:
(in thousands)
ProForma (1)
December 31, June 30, June 30,
2001 2002 2002
-------- -------- --------
Cash, cash equivalents and
short-term investments $240,040 $200,942 $198,942
Working capital 220,621 168,602 187,756
Total assets 266,181 227,355 223,355
Long-term obligations 180,125 180,058 180,058
Total stockholders' equity 39,430 329 20,368
(1) Includes the effects on the balance sheet data presented
related to the termination of our agreement with Aventis, the
restructuring charge and the sale of our sales force which was
announced on August 1, 2002.