ViroPharma's CEO Discusses Q2 2012 Results - Earnings Call Transcript

ViroPharma Inc. (VPHM)

Q2 2012 Earnings Call

August 9, 2012 9:00 am ET


Vincent J. Milano – Chairman, President and Chief Executive Officer

J. Peter Wolf – Vice President, General Counsel and Secretary

Charles A Rowland – Vice President, Chief Financial Officer

Colin Broom – Vice President and Chief Scientific Officer

Daniel B. Soland – Vice President and Chief Operating Officer


Brian Abrahams – Wells Fargo Securities

Geoff Meacham – JPMorgan

Thomas Wei – Jefferies & Company

Rachel McMinn – Bank of America Merrill Lynch

Lisa Bayko – JMP Securities

Brian Skorney – Brean Murray

Mario Corso – Caris & Company

Philip Nadeau – Cowen & Company

Stephen Willey – Stifel Nicolaus & Company, Inc.

Joseph Schwartz – Leerink Swann Llc



Good morning everyone, and welcome to the ViroPharma Second Quarter 2012 Results Conference Call. Today’s call is being recorded and is expected to last one hour. At this time, I will now turn the call over to ViroPharma’s Chief Executive Officer, Vin Milano. Please go ahead.

Vincent J. Milano

Thank you, Operator. Good morning, and welcome to everyone joining us on today’s call to discuss our performance for the second quarter of 2012. I’m joined by the other members of the ViroPharma management team, as well as Rich Morris, Will Roberts, and Bob Doody. Before we proceed, Pete Wolf, our General Counsel will provide you of our potential to make forward-looking statements. Pete?

J. Peter Wolf

Thanks, Vin. During this call, we will make forward-looking statements certain statements such as those regarding our expectations for financial results including guidance, peak year, net sales for Cinryze, peak year European net sales and tax rates, manufacturing capacities, the timing of clinical studies, potential or product candidates and clinical development, changes in channel inventory, our commercial launches of Cinryze, Plenadren and Buccolam in Europe and our ability to continue to identify additional Cinryze patients are examples of such forward looking statements.

As you know forward-looking statements are subject to factors that may cause our results and plans to materially differ from those expected. Please refer to the press release issued this morning and to our filings with the SEC for more information regarding the risks and uncertainties that could cause future results to differ materially from those expectations expressed in this conference call.

In this call, we will also discuss some non-GAAP measures in talking about our Company’s performance and you can find the reconciliation of those measures to GAAP measures in our press release issued this morning.

I’ll now turn the call back over to Vin.

Vincent J. Milano

Thanks, Pete. As you may recall, we provided our last update in May. I spoke of how we viewed the entry of generic Vancocin, as the opportunity for new beginning of positive strong growth and momentum for ViroPharma. I am very pleased to be providing you with an update this morning that eliminates any doubt about the positive direction we believe our company is heading throughout the rest of 2012 and beyond.

The agenda for today’s call is that I will provide an overview of the company’s recent progress, Charlie will then provide the financial overview of the quarter and I will return for a few closing comments before taking your questions.

For some areas of the company, our comments will be brief as we are preparing more robust content for our Analyst Day on September 21. We plan to distribute the formal invitation through this event next week.

As we reported a few days ago, the FDA approved our prior accrual supplement for industrial scale manufacturing of Cinryze. We believe this approval paves the way for us to provide for and ensure that any patient who can benefit from Cinryze has access to an uninterrupted supply.

Secondly, it also opens up the ability for our clinical development teams to more aggressively pursue additional development of Cinryze, whether it would be our subcutaneous administration program or other serious conditions of unmet need that could benefit from C1 inhibitor.

I am very proud of the can do attitude of the joint ViroPharma/Sanquin team in achieving the PAS approval. And I am extremely thankful to the patients, physicians, HAEA and many others for their willingness to work with us and work through any challenges that confronted us. I would also like to note the efforts of the FDA’s CBER review team, who also worked together with us in a very professional manner.

So now, let’s move into some of the facts that how this approval impacts the business moving ahead. As we noted earlier, the industrial scale line is capable of producing on a single shift between 100,000 and 110,000 doses annually. We have plans in place to add additional shifts as well as increase in production through various other means.

As it pertains to 2012 specifically, we expect that we’ll be able to produce more than enough doses to not only meet the expected demand for the year, but also all of our clinical needs. We anticipate product produced at risk from our industrial scale manufacturing line to start being available for sale on approximately six weeks.

Our first priority is to get all patients back to receiving monthly shipments as opposed to the weekly shipments they have been and are currently receiving. We expect this to occur during the third quarter. In the fourth quarter, we expect our SPs and SDs will be in a position to be begin to rebuild their inventories.

Moving on to Cinryze demand; since the launch, we’ve demonstrated a very steady and consistent demand growth every quarter, and the second quarter of 2012 marked yet another very impressive period of growth. During the quarter we added approximately 60 gross new patients on Cinryze therapy, and across the first half of 2012 we have added over 120 gross new patients on the Cinryze therapy. As further evidenced of the tremendous strength of our demand growth, I’ll also add that in July we had the second strongest month of new scripts generated in the past three years.

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