ViroPharma Announces First Quarter 2013 Financial Results

          ViroPharma Announces First Quarter 2013 Financial Results

- Quarterly Global Cinryze® (C1 esterase inhibitor [human]) Net Sales Grew by
46 Percent to $99.5 Million -

PR Newswire

EXTON, Pa., May 1, 2013

EXTON, Pa., May 1, 2013 /PRNewswire/ --ViroPharma Incorporated (Nasdaq: VPHM)
today announced financial results for the first quarter of 2013. Net sales
were $107 million for the first quarter ended March 31, 2013 as compared to
$136 million in the comparative period of 2012. The decline in net sales
quarter over quarter was driven by thedecrease in Vancocin revenues partially
offset by commercial product growth for Cinryze. The first quarter 2013 U.S.
Cinryze net sales which grew by 44 percent over the first quarter of 2012 to
$97 million, including approximately $91 million of patient demand. The
balance represented additional inventory in the channel.

"The early part of 2013 has seen great progress both in our commercial
business as well as our development pipeline," stated Vincent Milano,
ViroPharma's chief executive officer. "In addition to the virologic response
data we will share during our conference call today from subjects enrolled
into our two maribavir studies, we also expect results from several key
programs for Cinryze in the coming quarters such as subcutaneous Cinryze
administration, antibody-mediated rejection (AMR) in kidney transplant, new
uses for C1 INH, as well as additional progress updates with maribavir."

Our GAAP net loss was $64 million in the first quarter of 2013 compared to net
income of $20 million in the first quarter of 2012. GAAP diluted net loss per
share was $(0.98) for the first quarter of 2013 compared to GAAP diluted
earnings per share of $0.26 for the same period in 2012. The loss for the
quarter was driven by a $104 million non-cash impairment charge related to the
Vancocin intangible asset due to rapid decline in market price of generic
vancomycin. Also driving the quarter over quarter decrease was the loss of
Vancocin revenues partially offset by the continued growth of Cinryze.

Non-GAAP adjusted net income for the three months ended March 31, 2013 was $11
million, compared to $31 million for the same period in 2012. Non-GAAP
adjusted diluted net earnings per share was $0.15 for the first quarter of
2013 compared to $0.37 for the same period in 2012. 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 first quarter of 2013 were $99.5 million, a 46
percent increase over the same period in 2012 driven by demand growth,
rebuilding channel inventories and net realized price growth. Vancocin net
sales during the three months were $4 million compared to $66 million for the
same period in 2012. The decrease is due to the impact of the launch of
generic versions of vancomycin in April of 2012. During the first quarter of
2013, we generated net sales of approximately $7 million from our European

Cost of sales decreased for the three months ended March 31, 2013 as compared
to the three months ended March 31, 2012 by $2 million. The decrease in cost
of sales was due to product mix and overall sales decline of Vancocin compared
to the same period in the prior year. We anticipate that our cost of sales, on
a relative basis, will remain higher than historical levels due to the
introduction of generic vancomycin and the reduction of our sales of Vancocin
relative to our Cinryze sales along with the royalty due to Genzyme on
Vancocin-related sales.

Research and development costs incurred during the first quarter of 2013
increased compared to the same period in 2012 due to advancements in our
clinical development programs, including the subcutaneous Cinryze and
maribavir development programs, among others. The increase in selling, general
and administrative expenses for the first quarter of 2013 compared to the same
period in 2012 was driven by the growth of our global organization and our
European commercialization efforts.

Because our Vancocin intangible asset is amortizable for tax purposes, we
recorded a tax benefit of $41 million related to the impairment of the asset.
We recognized a total tax benefit of $42 million in the quarter ended March
31, 2013 compared to a tax expense of $18 million in the quarter ended March
31, 2012.

Working Capital Highlights

At March 31, 2013, our working capital was $356 million, which included cash,
cash equivalents and short term investments of $261 million. During the first
quarter of 2013 we generated $14 million net cash from operations.

Financial Highlights ($ in millions, except per share data)
                                         Q1 2013 Q1 2012
Total net product sales                  $107.1  $135.8  -21%
Cinryze U.S. net product sales           96.8    67.0    +44%
EU net product sales                     6.8     2.7     +152%
Vancocin net product sales               3.6     66.2    -95%
GAAP net income (loss)                   (64.0)  20.0
Non-GAAP adjusted net income             11.1    31.1
GAAP diluted net income (loss) per share (0.98)  0.26
Non-GAAP adjusted diluted EPS            0.15    0.37

Non-GAAP Disclosures

The Company is reporting both GAAP net income (loss) and non-GAAP adjusted
results for the three months ended March 31, 2013 and 2012. 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) changes in contingent consideration, (5) option
amortization and (6) certain non-recurring events, including asset
impairments. 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.

Research and Development Programs

ViroPharma is investing in research and development programs to ensure growth
for the future. The current pipeline includes programs in various stages of
clinical and pre-clinical development focused on rare diseases and serious
unmet medical needs.

  oSubcutaneous administration of Cinryze – In December 2012, we initiated a
    Phase 2b double blind, multi-center, dose ranging study to evaluate the
    safety and efficacy of subcutaneous administration of in combination with
    Halozyme's recombinant human hyaluronidase enzyme (rHuPH20) in adolescents
    and adults with HAE for prevention of HAE attacks. We expect to complete
    enrollment in this study during the first week of May, 2013.
  oNew uses for C1 INH - We are investigating potential new uses for our C1
    esterase inhibitor product with a goal of pursuing additional indications
    in patient populations with other C1 INH mediated diseases. To that end,
    we are supporting investigator-initiated studies (IISs) evaluating C1 INH
    as a treatment for patients with Neuromyelitis Optica (NMO) and Autoimmune
    Hemolytic Anemia (AIHA); both of these studies were initiated in 2012. We
    are also conducting a clinical trial in Antibody-Mediated Rejection (AMR)
    post renal transplantation and are evaluating the potential effect of
    C1-INH in Refractory Paroxysmal Nocturnal Hemoglobinuria (PNH). ViroPharma
    plans to continue to conduct both clinical and non-clinical studies to
    evaluate additional therapeutic uses for its C1 INH product in the
  oMaribavir for cytomegalovirus – We are currently enrolling patients into a
    Phase 2 program to evaluate maribavir for the treatment of CMV infections
    in transplant recipients. The program consists of two independent Phase 2
    clinical studies that include subjects who have asymptomatic CMV in one
    trial, and those who have failed therapy with other anti-CMV agents in
    another trial. Additional data from these ongoing studies will be
    provided during today's conference call.
  oVP-20629 for Friedreich's Ataxia (FA) – We expect to initiate a single and
    repeat dose phase 1 study in patients in 2013.
  oOral Budesonide for eosinophilic esophagitis (EOE) – We currently have an
    exclusive option agreement to acquire Meritage Pharma, Incorporated based
    on predefined terms pending data outcomes from a Phase 2 study and
    concurrence with the U.S. FDA on an acceptable clinical endpoint for the
    Phase 3 program. The Phase 2 study is currently enrolling with data
    expected in 2014.

2013 Guidance

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 is providing the following update:

  oWorldwide net product sales are expected to be $440 to $465 million; 
  oNet North American Cinryze sales are expected to be $390 to $400 million;
  oResearch and development (R&D) and selling, general and administrative
    (SG&A) expenses are expected to be $240 to $260 million.

Conference Call and Webcast

ViroPharma is hosting a live teleconference and webcast with senior management
to discuss the financial announcement, guidance, and all other operational
results of the first quarter on May 1, 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 Windows Media or Real
Player will be needed to access the webcast. An audio archive will be
available at the same address until May 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,
cytomegalovirus (CMV), Friedreich's Ataxia, eosinophilic esophagitis (EoE) and
adrenal insufficiency. 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 in children and adolescents,
adrenal insufficiency and C. difficile-associated diarrhea (CDAD). For full
U.S. prescribing information on our products, please download the package
inserts at; the prescribing
information for other countries can be found at

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, The company encourages investors to
consult these sections 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 ability to continue to successfully
commercialize our products in the United States and Europe, the timing and
results of anticipated events in our clinical development programs; 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 and retain prophylaxis Cinryze
    patients in the United States and Europe at the rate we anticipate, the
    total number of potential prophylaxis Cinryze patients in the United
    States and Europe and our market share of HAE patients in the United
    States and Europe;
  othe size of the market, future growth potential and market share for
    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 and SP 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,
    Buccolam and Plenadren;
  ochanges in prescribing or procedural practices of physicians, including
    off-label prescribing of products competitive with Cinryze, Buccolam and
  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 formulations, Cinryze
    for antibody mediated rejection, and maribavir for treatment of CMV
    infections in transplant recipients;
  owhether we pursue regulatory approval of Plenadren in the United States;
  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 and our efforts to find a partner for VP20621.

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. 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. Clinical data presented
regarding studies with maribavir is interim data as the studies are ongoing.
There can be no assurance that the interim data is representative of the final
clinical data from the studies or that the results of the studies will support
future clinical studies of maribavir. 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, 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.

Selected Financial Information
Consolidated Statements of            Three months ended
(in thousands, except per share data) March 31,
                                      2013                  2012
Net product sales                     $     107,149    $    135,800
Costs and Expenses:
Cost of sales (excluding amortization 29,859                32,079
of product rights)
Research and development              17,197                15,399
Selling, general and administrative   42,724                37,949
Intangible amortization               8,899                 8,827
Impairment loss                       104,245               -
Other operating expenses              2,084                 1,236
 Total costs and expenses           205,008               95,490
 Operating income (loss)           (97,859)              40,310
Other Income (Expense):
Interest income                       165                   136
Interest expense                      (3,609)               (3,447)
Other income (expense), net           (4,152)               1,061
Income (loss) before income tax       (105,455)             38,060
expense (benefit)
Income tax expense (benefit)          (41,458)              18,069
 Net income (loss)                 $      (63,997)  $     19,991
Basic net income (loss) per share     $              $       0.28
Diluted net income (loss) per share   $              $       0.26
Shares used in computing net income
(loss) per share:
Basic                                 65,207                70,512
Diluted                               65,207                85,026

Selected Financial Information
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
                                March 31,
                                2013                2012
GAAP net income (loss)         $   (63,997)      $   19,991
Non-cash interest expense       2,409               2,245
Intangible amortization         8,899               8,827
Share-based compensation        5,992               4,904
Option amortization             1,084               1,071
Contingent consideration        422                 1,112
Asset impairment                104,245             -
Tax effect of the above         (47,990)            (7,082)
Non-GAAP adjusted net income    $    11,064      $   31,068
Computation of Non-GAAP Adjusted Diluted Net Income per Share
Non-GAAP adjusted net income    $    11,064      $   31,068
Add interest expense on senior
                                625                 635
convertible notes, net of
income tax
Non-GAAP adjusted diluted net   $    11,689      $   31,703
Shares used in computing GAAP
diluted                         65,207              85,026

net income (loss) per share
Shares used in computing
                                79,147              85,026
adjusted diluted net income per
GAAP diluted net income (loss) $     (0.98)    $     0.26
per share
Non-GAAP adjusted diluted net
income                         $      0.15    $     0.37

per share

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.

Selected Financial Information
Selected Consolidated Balance Sheet   March 31,            December 31,
(in thousands)                       2013                 2012
Current assets:
Cash and cash equivalents             $            $        
                                      199,197              175,518
Short-term investments                61,607               71,338
Inventory                             73,409               64,384
Total current assets                  456,829              453,418
Intangible assets, net                503,529              617,539
Goodwill                              96,361               96,759
Total assets                          1,107,917            1,219,952
Liabilities and Stockholders' Equity
Total current liabilities             $            $        
                                      100,660              114,028
Deferred tax liabilities              123,357              167,484
Long-term debt                        163,968              161,793
Total liabilities                     407,381              462,913
Total stockholders' equity            700,536              757,039
Total liabilities and stockholders'   1,107,917            1,219,952
                                      Three months ended
                                      March 31,            March 31,
Statement of Cash Flows:              2013                 2012
(in thousands)
Net cash provided by operating        $           $         
activities                            13,863               53,311
Net cash provided by investing        8,643                17,894
Net cash provided by (used in)        2,022                (39,611)
financing activities

SOURCE ViroPharma Incorporated

Contact: Charles A. Rowland, Jr., Vice President, Chief Financial Officer,
Phone (610) 321-6223; Robert A. Doody Jr., Director, Investor Relations, Phone
(610) 321-6290; Michelle Larkin (media), Manager, PR & Advocacy, Phone (610)
Press spacebar to pause and continue. Press esc to stop.