EXTON, Pa., Oct. 29, 2002 (PRIMEZONE) -- ViroPharma Incorporated (Nasdaq:VPHM) reported today financial results for the third quarter ended September 30, 2002.
For the quarter ended September 30, 2002, ViroPharma reported net income allocable to common stockholders of $17.4 million compared to a net loss of $20.9 million for the same period in 2001.
Net income per share allocable to common stockholders for the quarter ended September 30, 2002 was $0.71 per share, basic and diluted, compared to a net loss allocable to common stockholders of $1.12 per share, basic and diluted, for the same period in 2001. In the third quarter of 2002, the company restructured its organization and discontinued its sales force operations. Income from discontinued operations was $12.3 million for the quarter ended September 30, 2002. This income included a $15.4 million gain on the sale of ViroPharma's sales force to Aventis Pharmaceuticals Inc., detailing fees of $4.4 million, $3.0 million in costs related to both the severance of personnel and the termination of operational commitments related to the sales force and $4.5 million in sales operations costs. Costs associated with the discontinued operations for the same period of 2001 were immaterial. In addition, during the third quarter of 2002 the company purchased $23.7 million of face value of its outstanding convertible notes for $8.2 million, resulting in a gain of $15.2 million after the write-off of related debt issue costs. In the quarter ended September 30, 2002, the company recognized as revenue the remaining up-front license fee of $4.0 million related to its Picovir(r) collaboration with Aventis Pharmaceuticals Inc., which was terminated in August 2002.
Research and development expenses for the third quarter of 2002 were $9.6 million compared to $12.3 million for the same period in 2001. In the third quarter of 2002, the company's primary research and development activities were focused on advancing its lead product candidate for the treatment of hepatitis C through pre-clinical development, completing phase 1 studies with its lead product candidate to treat respiratory syncytial virus disease, completing drug interaction studies with Picovir(r), the company's anti-picornavirus product candidate, and discovery research. Also included in the third quarter of 2002 was $0.5 million of research and development restructuring costs. In the third quarter of 2001, the company's primary research and development focus related to Picovir(r) for the treatment of the common cold in adults, including manufacturing validation batches of Picovir(r). In addition, the company commenced additional clinical trials for Picovir(r) for the treatment of common cold in pediatric patients and for the prophylaxis of the common cold in healthy adults in the third quarter of 2001.
General and administrative expenses for the third quarter of 2002 were $2.3 million compared to $4.5 million for the same period in 2001. The difference in general and administrative expenses for the two periods is primarily due to costs incurred in the third quarter of 2001 to complete the co-promotion and co-development agreement with Aventis. Included in the third quarter of 2002 were $0.1 million of general and administrative restructuring costs. Marketing expenses for the third quarter of 2002 were $0.7 million, primarily consisting of restructuring costs, compared to $4.2 million for the same period of 2001. The decrease is due to the reduction of marketing activities related to Picovir(r).
As of September 30, 2002 the company had approximately $176.1 million in cash, cash equivalents and short-term investments.
For the nine-month period ended September 30, 2002, ViroPharma reported a net loss allocable to common stockholders of $20.8 million compared to a net loss of $62.0 million for the same period in 2001.
Net loss per share allocable to common stockholders for the nine-month period ended September 30, 2002 was $0.89 per share, basic and diluted, compared to a net loss allocable to common stockholders of $3.58 per share, basic and diluted, for the same period in 2001. During the nine-months ended September 30, 2002, the company restructured its organization and discontinued its sales force operations. Income from discontinued operations was $10.4 million for the nine-months ended September 30, 2002. This income included a $15.4 million gain on the sale of ViroPharma's sales force to Aventis Pharmaceuticals Inc., detailing fees of $17.2 million, $3.0 million in costs related to both the severance of personnel and the termination of operational commitments related to the sales force and $19.2 million in sales operations costs. Costs associated with the discontinued operations for the same period of 2001 were immaterial. In addition, during the nine-months ended September 30, 2002 the company purchased $23.7 million of face value of its outstanding convertible notes for $8.2 million, resulting in a gain of $15.2 million after the write-off of related debt financing costs. In the nine-months ended September 30, 2002, the company recognized as revenue the remaining up-front license fee of $4.6 million related to its Picovir(r) collaboration with Aventis Pharmaceuticals Inc., which was terminated in August 2002. In the nine-month period ended September 30, 2001, the company earned license fee and milestone revenue of $2.75 million in connection with the hepatitis C collaboration with Wyeth compared to $0.6 during the same period in 2002. During the nine-months ended September 30, 2001, the company incurred a non-cash charge of $16.5 million resulting from the issuance of 750,000 shares of common stock to Sanofi-Synthelabo in the first quarter of 2001 in exchange for the expansion of the company's intellectual property rights related to Picovir(r).
Research and development expenses for the nine-month period ended September 30, 2002 were $33.5 million compared to $31.2 million for the same period in 2001. During the nine-months ended September 30, 2002, the company had completed 3 clinical trials, prepared and participated in an advisory panel committee meeting, manufactured drug substance and completed phase 1 drug interaction studies, all related to Picovir(r). In addition, the company focused on advancing its lead product candidate for the treatment of hepatitis C through pre-clinical development, completing phase 1 studies with a product candidate to treat respiratory syncytial virus disease and discovery research. The research and development expenses for the nine-months ended September 30, 2001 were incurred primarily to the complete pivotal trials and all other studies included in the company's new drug application, or NDA, for Picovir(r) for the treatment of common cold in adults, the preparation of that NDA, and related activities. Also, in the nine-month period ended September 30, 2001, the company initiated additional clinical trials with Picovir(r) for the treatment of pediatric common cold and for the prophylaxis of common cold in healthy adults.
General and administrative expenses were $7.5 million in the nine-months ended September 30, 2002 compared to $9.3 million for the same period of 2001. The decrease in general and administrative expenses is primarily due to costs incurred in 2001 to complete the co-promotion and co-development agreement with Aventis.
Marketing expenses in the nine-months ended September 30, 2002 were $6.8 million compared to $8.1 million for the same period of 2001. The decrease is due to the reduction of marketing activities beginning in the second quarter of 2002 related to Picovir(r).
Note to Investors: ViroPharma will host a conference call Wednesday October 30, 2002 at 10:30 a.m. (EST) to further discuss its financial results. To participate in the call, please dial: (800) 992-7413 domestic, (801) 303-7424 for international. After placing the call, please tell the operator you wish to join the ViroPharma conference call.
Additionally, the conference call will be webcasted at ViroPharma's web site: www.viropharma.com and go to the investor relations section. If you are unable to participate during the live webcast, the conference call will be archived at this same address for 30 days.
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.
VIROPHARMA INCORPORATED
Selected Financial Information
Statements of Operations:
Three-months ended Nine-months ended
September 30, September 30,
2001 2002 2001 2002
------------ ------------ ------------ ------------
Revenues:
License fee
and milestone
revenue $ 346,154 $ 4,127,350 $ 2,846,154 $ 5,204,273
Other
revenue -- 92,825 -- 92,825
------------ ------------ ------------ ------------
Total
revenues 346,154 4,220,175 2,846,154 5,297,098
------------ ------------ ------------ ------------
Continuing
operating
expenses
incurred
in the
development
stage:
Research and
development 12,340,218 9,649,374 31,241,683 33,497,893
Acquisition
of tech-
nology
rights -- -- 16,500,000 --
Marketing 4,207,810 703,835 8,084,927 6,754,809
General and
administra-
tive 4,481,589 2,276,903 9,255,697 7,500,782
------------ ------------ ------------ ------------
Total
operating
expenses 21,029,617 12,630,112 65,082,307 47,753,484
------------ ------------ ------------ ------------
Loss from
continuing
operations (20,683,463) (8,409,937) (62,236,153) (42,456,386)
------------ ------------ ------------ ------------
Gain on re-
purchase of
debt -- 15,203,939 -- 15,203,939
Interest
income 2,744,007 1,178,876 9,289,205 4,741,113
Interest
expense 2,912,911 2,844,698 8,706,653 8,664,972
------------ ------------ ------------ ------------
Income (loss)
from
continuing
operations (20,852,367) 5,128,180 (61,653,601) (31,176,306)
------------ ------------ ------------ ------------
Discontinued
operations:
Income from
discontinued
sales
operations
(including
gain on
disposal of
$15,410,000) -- 12,314,570 -- 10,381,388
------------ ------------ ------------ ------------
Income (loss) (20,852,367) 17,442,750 (61,653,601) (20,794,918)
------------ ------------ ------------ ------------
Preferred
stock
dividends -- -- 345,242 --
------------ ------------ ------------ ------------
Net income
(loss)
allocable to
common
stockholders $(20,852,367) $ 17,442,750 $(61,998,843) $(20,794,918)
============ ============ ============ ============
Basic and
diluted net
income (loss)
per share
from
continuing
operations
allocable to
common
stockholders $ (1.12) $ 0.21 $ (3.58) $ (1.33)
============ ============ ============ ============
Basic and
diluted income
per share
from
discontinued
operations $ -- $ 0.50 $ -- $ 0.44
============ ============ ============ ============
Basic and
diluted net
income (loss)
per share
allocable
to common
stockholders $ (1.12) $ 0.71 $ (3.58) $ (0.89)
============ ============ ============ ============
Shares used in
computing
basic net
income (loss)
per share
allocable
to common
stockholders 18,611,706 24,663,206 17,310,762 23,354,238
============ ============ ============ ============
Shares used
in computing
diluted net
income (loss)
per share
allocable to
common
stockholders 18,611,706 24,733,944 17,310,762 23,354,238
============ ============ ============ ============
VIROPHARMA INCORPORATED
Selected Financial Information
Balance Sheets: (in thousands)
December 31, September 30,
2001 2002
--------------- ---------------
Cash, cash equivalents and
short-term investments $ 240,040 $ 176,100
Working capital 220,621 166,628
Total assets 266,181 195,591
Long-term debt 180,125 156,333
Total stockholders' equity 39,430 22,362