EXTON, Pa., May 11, 2005 (PRIMEZONE) -- ViroPharma Incorporated (Nasdaq:VPHM) today announced the purchase of $29.0 million of its outstanding 6% convertible subordinated notes due March 2007. ViroPharma purchased these notes for $27.9 million. Through this purchase, the company has reduced the aggregate principal amount of its outstanding 2007 convertible subordinated notes to $98.9 million.
"Since our acquisition of Vancocin(r) Pulvules(r), our focus has been on executing in all areas of our business and finding ways to bring additional value to the company and our shareholders; one of the most important efforts has been toward identifying ways to improve our capital structure," commented Vincent Milano, ViroPharma's chief financial officer. "Thanks to the strong sales performance of Vancocin, we are being proactive in our efforts to reduce the outstanding amount of our 2007 convertible subordinated notes. As we have said in the past, the acquisition opened the door to positive opportunities to manage our debt that did not exist for us in the past. This first step -- the repurchase of 23% of the outstanding 2007 convertible subordinated notes -- marks a very good start to the effort."
Milano added, "Our efforts are focused on evaluating alternatives of eliminating or refinancing the nearer term debt that are non-equity dilutive to our shareholders. In addition, because our use of cash to purchase the notes is not an operating expense, we are not changing our guidance as a result of this significant transaction, and are reiterating our May 3, 2005 guidance that we expect to be cash flow positive from operating activities in 2005. Our cash position at the end of 2005 will depend on the operating cash flows and any additional investments, including debt repurchases, we may make in our business during the remainder of the year."
These notes repurchase transactions were funded primarily through a combination of the $11.8 million in net proceeds from the April 2005 issuance of additional Senior Convertible Notes due 2009 pursuant to the purchase option provided in the Securities Purchase Agreement dated October 18, 2004, and cash flow generated from the business. The total savings to the company for interest payments and discounts resulting from these transactions will be approximately $4.3 million between now and the maturity date of the 2007 convertible subordinated notes.
About ViroPharma Incorporated
ViroPharma Incorporated is committed to the development and commercialization of products that address serious diseases treated by physician specialists and in hospital settings. ViroPharma commercializes Vancocin(r) Pulvules(r), approved for oral administration for treatment of antibiotic-associated pseudomembranous colitis caused by Clostridium difficile and enterocolitis caused by Staphylococcus aureus, including methicillin-resistant strains (for prescribing information, please download the package insert at http://www.viropharma.com/docs/pulvules_pi.pdf). ViroPharma currently focuses its drug development activities in viral diseases including cytomegalovirus (CMV) and hepatitis C (HCV). For more information on ViroPharma, visit the company's website at www.viropharma.com.
Certain statements in this press release contain forward-looking statements that involve a number of risks and uncertainties, including those relating to the company's efforts to reduce the outstanding balance of the convertible subordinated notes due 2007 in ways that are non equity-dilutive, and its anticipation of being cash flow positive from operating activities in 2005. The Company's actual results could differ materially from those results expressed in, or implied by, these forward-looking statements. 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, 2004 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