ViroPharma Incorporated Reports Fourth Quarter and Full Year 2012 Financial Results

 ViroPharma Incorporated Reports Fourth Quarter and Full Year 2012 Financial
                                   Results

- Company Delivers Record Full Year Worldwide Cinryze® (C1 esterase inhibitor
[human]) Net Sales of $327 Million -

PR Newswire

EXTON, Pa., Feb. 27, 2013

EXTON, Pa., Feb. 27, 2013 /PRNewswire/ --ViroPharma Incorporated (Nasdaq:
VPHM) reported today its financial results for the fourth quarter and year
ended December 31, 2012.

In 2012, we:

  oAchieved $428 million in annual net product sales, highlighted by $327
    million in Worldwide net sales of Cinryze® (C1 esterase inhibitor
    [human]);
  oGenerated net sales of approximately $17 million in Europe;
  oAttained GAAP net income of $6 million; and non-GAAP adjusted net income
    of $51 million;
  oDelivered positive cash flows from operations of $43 million;
  oUtilized $180 million of cash to repurchase approximately 7 million shares
    of ViroPharma stock; and
  oFinished the year with working capital of $339 million, including cash,
    cash equivalents and short-term investments of $247 million.

Net sales were $106.5 million and $427.9 million for the fourth quarter and
year ended December 31, 2012, respectively, as compared to $145.6 million and
$544.4 million in the comparative periods of 2011, respectively. The decline
in net sales quarter over quarter and year over year was driven as a result of
the loss of Vancocin revenues partially offset by Cinryze growth. The 2012
U.S. Cinryze net sales of $320.6 million included approximately $311 million
of patient demand. The balance represented additional inventory in the
channel.

"ViroPharma enters 2013 in a strong position to generate significant growth
for years to come," stated Vincent Milano, ViroPharma's chief executive
officer. "Cinryze in the U.S. continues to exceed our expectations, our
products in Europe are beginning to demonstrate traction as we continue to
expand those launches throughout the EU, the pipeline is more robust than it
has ever been in our company's history and financially our company is in a
very good position to remain opportunistic for the right business development
assets. Additionally, we've very aggressively improved our capital structure
through our stock repurchase program. In 2013, our focus will remain on
execution and continuing to deliver positive results to all of our key
stakeholders and most importantly those that are at the core of our mission,
the patients."

Our GAAP net loss was $4 million in the fourth quarter of 2012 compared to net
income of $53.2 million in the 2011 fourth quarter. GAAP diluted loss per
share was $(0.06) for the fourth quarter of 2012 compared to GAAP diluted
earnings per share of $0.65 for the same period in 2011. For the full year in
2012, GAAP net income was $5.6 million compared to $140.7 million of GAAP net
income during 2011. GAAP diluted earnings per share was $0.08 for the full
year 2012 compared to $1.68 during 2011.

Non-GAAP adjusted net income for the three months and year ended December 31,
2012 was $7.1 million and $50.8 million, respectively, compared to $50.6
million and $181.9 million for the same periods in 2011. Non-GAAP adjusted
diluted earnings per share was $0.10 for the fourth quarter of 2012 compared
to $0.61 for the same period in 2011. Non-GAAP adjusted diluted earnings per
share was $0.64 for the full year 2012 compared to $2.09 for the full year
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 and year ended December 31, 2012
were $97.0 million and $327.1 million, respectively, a 45 percent and 30
percent increase over the respective periods in 2011 due to demand growth.
Vancocin net sales during the three and twelve months ended December 31, 2012
were $5.0 million and $90.8 million, respectively, compared to $77.8 million
and $288.9 million during the three months and year ended December 31, 2011,
respectively. The decrease is due to the introduction of generic vancomycin.

Cost of sales increased for the three months and year ended December 31, 2012
primarily due to the effect of continuing growth of Cinryze and the royalty
due to Genzyme for Vancocin sales which was not payable in 2011.

Research and development costs incurred during 2012 were relatively flat
compared to 2011 as the increased spending during 2012 in our various programs
was offset by upfront and license payments of $15.5 million to Halozyme and a
$3.0 million license payment to Intellect Neurosciences in 2011. The increase
in selling, general and administrative expenses in the year ended December 31,
2012 compared to the year ended December 31, 2011 was driven by the growth of
our global organization and our commercialization efforts.

We incurred other operating expenses of $8.7 million in the year ended
December 31, 2012 compared to $8.5 million in the year ended December 31,
2011. During 2012, we recognized $4.5 million of expense due to the
re-measurement of the fair value of the contingent consideration and $3.7
million of start-up cost paid to suppliers. Results for 2011 included $4.7
million of expense due to the re-measurement of the fair value of the
contingent consideration, $3.4 million of costs to expand Cinryze
manufacturing capacity at Sanquin and an $8.5 million impairment charge
related to certain assets acquired from Auralis.

Our tax expense for the quarter was $2.5 million and $13.4 million for the
year versus $10.2 million and $67.3 million for the respective prior year
periods. Our effective tax rate for 2012 was 71 percent up from 32 percent
for the previous year. The effective tax rate for 2012 was impacted by
approximately 170 basis points due to the recording of a valuation allowance
related to certain state net operating losses.

Working Capital Highlights

At December 31, 2012, our working capital was $339.4 million compared to
$537.3 million at December 31, 2011 as we generated $43 million in cash flow
from operations and deployed $180.3 million to repurchase 6.9 million shares
during 2012.

Looking ahead in 2013

ViroPharma is providing guidance for the year 2013 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 2013, ViroPharma expects the following:

  oWorldwide net product sales are expected to be $450 to $475 million;
  oNet North American Cinryze sales are expected to be $390 to $400 million;
    and
  oResearch and development (R&D) and selling, general and administrative
    (SG&A) expenses are expected to be $240 to $260 million.

Non-GAAP Disclosures

The Company is reporting both GAAP net income (loss) and non-GAAP adjusted
results for the three months and year ended December 31, 2012 and
2011.Non-GAAP adjusted net income is GAAP net income (loss) excluding (1)
non-cash interest expense, (2) amortization related to intangible assets
acquired, (3) share-based compensation expenses, (4) contingent consideration,
and (5) 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
(loss) 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
February 27, 2013 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 March 15, 2013.

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, and adrenal insufficiency,
cytomegalovirus (CMV); 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, adrenal insufficiency 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, and the risk factors included in our periodic filings
with the Securities and Exchange Commission for more information on ViroPharma
and our business.

Disclosure Notice

Certain statements in this press release contain forward-looking statements
that involve a number of risks and uncertainties. Forward-looking statements
provide our current expectations or forecasts of future events. Forward
looking statements in this press release include our financial guidance for
2013, forecasted future tax rates, our belief that we are in a strong position
to generate significant growth for years to come, the rate of future growth,
our ability to continue to successfully commercialize our products in the
United States and Europe, and our ability to identify and execute upon
business development opportunities.

Our actual results may vary depending on a variety of factors, including:

  oour ability to continue to identify Cinryze patients in the United States
    and Europe at the rate we anticipate and the total number of potential
    Cinryze patients in the United States and Europe;
  othe size of the market, future growth potential and market share for
    Cinryze in the United States, Europe and other territories;
  othe size of the market, future growth potential and market share for
    Cinryze, Buccolam and Plenadren in Europe;
  othe availability of sufficient third party payer reimbursement for each of
    our products in the United States and Europe;
  ofluctuations in wholesaler order patterns and inventory levels;
  ocompetition from the approval of products which are currently marketed for
    other indications by other companies or new pharmaceuticals and
    technological advances to treat the conditions addressed by Cinryze,
    Vancocin, Buccolam and Plenadren;
  ochanges in prescribing or procedural practices of physicians, including
    off-label prescribing of products competitive with Vancocin, Cinryze,
    Buccolam and Plenadren;
  omanufacturing, supply or distribution interruptions, including but not
    limited to our ability to acquire adequate supplies of Cinryze and our
    other products in order to meet demand for each product;
  oour ability to receive regulatory approval for the use of Cinryze for
    additional indications and routes of administration and in additional
    territories in the timeframes we anticipate or at all;
  othe impact of healthcare reform legislation in the United States;
  oactions by the FDA and EMA or other government regulatory agencies;
  othe timing and results of anticipated events in our clinical development
    programs including studies with Cinryze subcutaneous formulation, Cinryze
    for antibody mediated rejection, maribavir for treatment of CMV infections
    in transplant recipients, as well as VP20621 for recurrence of C.
    difficile; and,
  othe timing and nature of potential business development activities related
    to our efforts to expand our current portfolio through in-licensing or
    other means of acquiring products in clinical development or marketed
    products.

There can be no assurance that we will conduct additional studies or that we
will be successful in gaining regulatory approval of Cinryze for additional
indications, routes of administration or in additional territories. The entry
of competing generic products following FDA approval in April 2012 has and
will continue to significantly affect our sales of Vancocin and our financial
performance. Biologics such as Cinryze require processing steps that are more
difficult than those required for most chemical pharmaceuticals, and as a
result, Sanquin, our manufacturer of Cinryze has received observations on Form
483 which require us to continue to meet commitments made to the FDA related
to various manufacturing issues. In the event Sanquin fails to meet these
commitments, the FDA may take actions that limit our ability to manufacture
Cinryze. In the event Sanquin is not able to manufacture the anticipated
volume of product at the industrial scale as a result of either FDA
requirements, batch failures, variability in batch yields, required
maintenance or other causes, we may not be able to satisfy patient demand or
build safety stock. Additionally, the ability to increase the number of shifts
to produce Cinryze at Sanquin is subject to labor relations at Sanquin,
including but not limited to labor availability and the time necessary to
train such additional labor. Our inability to obtain adequate product
supplies to satisfy our patient demand may create opportunities for our
competitors and we will suffer a loss of potential future revenues. 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, 2011
and our subsequent Quarterly Reports on Form 10-Q for the periods ended March
31, 2012, June 30, 2012 and September 30, 2012, 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 Three months ended          Year ended
of Operations:
(in thousands, except   December 31,                December 31,
per share data)
                        2012           2011         2012          2011
Revenues:
Net product sales       $          $         $  427,933  $  544,374
                        106,490       145,575
Costs and Expenses:
Cost of sales
(excluding amortization 26,827         19,683       108,547       79,976

of product rights)
Research and            19,142         12,707       67,709        66,477
development
Selling, general and    50,978         36,022       174,315       127,775
administrative
Intangible amortization 8,857          7,774        35,301        31,035
Impairment loss         -              -            -             8,495
Other operating         2,710          94           8,718         8,488
expenses
 Total costs and      108,514        76,280       394,590       322,246
expenses
 Operating income     (2,024)        69,295       33,343        222,128
(loss)
Interest income         188            140          594           655
Interest expense        (3,599)        (3,475)      (14,093)      (12,640)
Other income (loss),    3,941          (2,563)      (823)         (2,136)
net
Income (loss) before    (1,494)        63,397       19,021        208,007
income tax expense
Income tax expense     2,489          10,219       13,410        67,348
 Net income (loss)   $        $        $          $  140,659
                        (3,983)        53,178       5,611
Basic net income (loss) $        $       $         $    
per share                (0.06)        0.75       0.08         1.89
Diluted net income      $        $       $         $    
(loss) per share         (0.06)        0.65       0.08         1.68
Shares used in
computing net income
per share:
Basic                   65,385         70,499       68,214        74,517
Diluted                 65,385         84,493       71,764        88,076

VIROPHARMA INCORPORATED
Selected Financial Information
(unaudited)
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted
Net Income
An itemized reconciliation between net income (loss) and adjusted net income
on a non-GAAP basis is as follows:
(in thousands)              Three months ended      Twelve months ended
                            December 31,            December 31,
                            2012         2011       2012         2011
GAAP net income (loss)     $         $        $        $      
                            (3,983)      53,178     5,611        140,659
Adjustments:
Non-cash interest expense   2,395        2,232      9,277        8,268
Intangible amortization     8,857        7,774      35,301       31,035
Up front license fees       -            -          -            18,500
Share-based compensation    5,021        3,371      21,132       14,242
Option amortization         1,085        -          3,825        -
Contingent consideration    883          -          4,477        4,664
expense
Asset impairment            -            -          -            8,495
Tax effect of the above     (7,114)      (5,217)    (28,865)     (33,230)
Manufacturing deduction    -            (6,206)    -            (6,206)
tax benefit
Net operating loss tax      -            (4,521)    -            (4,521)
benefit
Non-GAAP adjusted net       $        $        $         $      
income                      7,144        50,611     50,758       181,906
Computation of Non-GAAP Adjusted Diluted Net Income per Share
Non-GAAP adjusted net       $        $        $         $      
income                      7,144        50,611     50,758       181,906
Add interest expense on
senior convertible notes,   625          625        2,501        2,501
net of income tax
Non-GAAP adjusted diluted   $        $        $         $      
net income                  7,769        51,236     53,259       184,407
Shares used in computing
GAAP diluted net income per 65,385       84,493     71,764       88,076
share
Shares used in computing
Non-GAAP adjusted diluted   79,490       84,493     82,628       88,076
net income per share
GAAP diluted net income     $        $      $       $      
(loss) per share           (0.06)       0.65       0.08            1.68
Non-GAAP adjusted diluted   $       $      $       $      
net income per share       0.10         0.61       0.64            2.09

Use of Non-GAAP Financial Measures

Our "non-GAAP adjusted net income" excludes the following items from GAAP net
income (loss):

1. Non-cash interest expense: Non-GAAP adjusted net income excludes non-cash
interest expense on our convertible notes. We believe that excluding the
non-cash portion of our interest expense allows management and investors an
alternative view of our financial results "as if" our net income reflected
only the cash portion of our interest expense.

2. Purchase accounting and product acquisition related adjustments: Non-GAAP
adjusted net income excludes certain items related to our acquisitions. The
excluded items may include among other adjustments; charges related to
amortization of intangible assets arising from acquisitions and changes in the
fair value of future contingent consideration or significant transaction
costs.

3. Share-based compensation expense: Non-GAAP adjusted net income excludes
the impact of our non-cash share-based compensation expense. We believe that
excluding the impact of expensing share-based compensation better reflects the
recurring economic characteristics of our business.

Non-GAAP net income may exclude unusual or non-recurring items that are
evaluated on an individual basis. Our evaluation of whether to exclude an item
for purposes of determining our non-GAAP financial measures considers both the
quantitative and qualitative aspects of the item, including, among other
things (i) its size and nature, (ii) whether or not it relates to our ongoing
business operations, and (iii) whether or not we expect it to occur as part of
our normal business on a regular basis. For purposes of determining non-GAAP
net income, items such as asset impairment or upfront fees or milestone
payments under license agreements, may be excluded, among others, which will
be evaluated on an individual basis.

VIROPHARMA INCORPORATED
Selected Financial Information
(unaudited)
Selected Consolidated Balance Sheet     December 31,         December 31,
Data
(in thousands)                         2012                 2011
Assets
Current assets:
Cash and cash equivalents               $            $        
                                        175,518              331,352
Short-term investments                  71,338               128,478
Inventory                               64,384               60,316
Total current assets                    453,418              635,931
Intangible assets, net                  617,539              648,659
Goodwill                                96,759               13,184
Total assets                            1,219,952            1,336,797
Liabilities and Stockholders' Equity
Total current liabilities               114,028              98,651
Deferred tax liabilities                167,484              178,706
Long-term debt                          161,793              153,453
Total liabilities                       462,913              445,673
Total stockholders' equity              757,039              891,124
Total liabilities and stockholders'     1,219,952            1,336,797
equity
                                        Years Ended
                                        December 31,         December 31,
Statement of Cash Flows:                2012                 2011
(in thousands)
Net cash provided by operating          $           $        
activities                              43,015               170,726
Net cash used in investing activities   $            $       
                                        (38,049)             (101,047)
Net cash used in by financing           $             $       
activities                              (161,267)            (163,214)



SOURCE ViroPharma Incorporated

Website: http://www.viropharma.com
Contact: ViroPharma Incorporated Contacts - Charles A. Rowland, Jr., Vice
President, Chief Financial Officer, +1-610-321-6223, or Robert A. Doody Jr.,
Director, Investor Relations, +1-610-321-6290; Kristina M. Broadbelt (media),
Director, PR & Advocacy, +1-610-321- 2358