ViroPharma Inc. (VPHM) recently announced that it has entered into a global licensing deal with Halozyme Therapeutics, Inc. (HALO), for using the latter’s rHuPH20 (recombinant human hyaluronidase) in the development of a subcutaneous formulation of Cinryze.
As per the terms of the agreement, ViroPharma will make an upfront payment of $ 9 million to Halozyme. Halozyme is also entitled to receive up to $74 million as milestone payments upon the achievement of certain clinical and regulatory targets, along with a 10% royalty on future sales of the combination therapy (Cinryze with rHuPH20).
The agreement requires ViroPharma to fund all the development and commercialization expenses related to the program.
Under the collaboration, ViroPharma and Halozymewill initially focus on the development of a subcutaneous formulation of Cinryze for routine prophylaxis against attacks of hereditary angioedema (HAE).
We note that the subcutaneous formulation of the combination drug is expected to enter phase II studies by the end of 2011.
While Cinryze is currently marketed in the US for preventing angioedema attacks in adolescent and adult patients with HAE, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended the approval of Cinryze for the said indication in the first quarter of 2011.
Last month, ViroPharma reported its first quarter fiscal 2011 financial results. The company posted first quarter earnings of 44 cents per share, surpassing the Zacks Consensus Estimate by 4 cents and the year-ago figure by 15 cents. Higher product sales helped boost earnings.
Quarterly revenues of $127.0 million beat the Zacks Consensus Estimate of $122 million and were 40.1% above the year-ago revenue of $90.6 million. Revenues were spurred by higher sales of Cinryze and Vancocin.
Along with reporting financial results for the first quarter, ViroPharma updated its 2011 guidance. The company raised the lower end of its Cinryze sales guidance by $10 million, and now expects the drug sales to be in the range of $245–$260 million (old guidance: $235–$260 million) for 2011.
The guidance for expenses, both R&D and SG&A taken together, remained unchanged at $170 million–$190 million range.
We currently have a Neutral recommendation on ViroPharma, which is supported by a Zacks #3 Rank (short-term Hold rating).
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