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Quote from: David Randolph on January 16, 2006, 07:32:52 AM
Considering VPHM, although I love the stock, I feel I still don't know enough about their business model (or its industry) to consider it a long term pick. I find biotech and pharma stocks particularly hard to value and understand. I'm not familiar with the biotech and pharma industry.

But looking at the numbers on a comparative basis, VPHM seems to be still trading at deep discount when compared with its sector averages.

Drug stocks have long been a favorite of mine.  I do not think VPHM a long term holding; I think it fully valued.  VPHM has one product, an antibiotic, for which it paid $116 million to Lilly.  An antibiotic is not a bet the farm type of drug.  The company has a $1.1 billion market cap based on selling about $100 million per year in that product.  That gives it a price to sales ratio of about 10.  VERY VERY high.  The big drug cos (like a Pfizer) is only 3 or 4 these days, and even Amgen is about 8.  Trailing EPS is about 20 times, and guesstimate for 2006 is 18 times ... not a small number these days for a drug stock.  The development pipeline is not particularly impressive, and only one product has hit phase two.  Finding this stock when it got the rights to Vancocin was a great find and congratulations to all who profited (I never bought in - found it too late).  But I think that this stock has had its run and will essentially be dead money for awhile.   

Hi Big Dog,

Before I start to abuse you let me just say that I in general like dogs - especially big dogs 

Well I don't know if I would bet my farm on VPHM (or any stock for that matter) but I have earned enough on VPHM to buy a small farm. You might want to do a little DD before you take your final decision on Viropharma.

VPHM does not have any Antobiotics. They have the only known cure for Diff C a bug that is spreading with pandemic speed in the US. As a result of this they have been able to increase the price of Vancocin very significant.

Based on the subscription numbers it seems like the price increases have had no influence on the demand for the drug (hardly surpirsing if you are dying!).

Concerning their pipeline they do actually have a couple of drugs with the potential to be blockbusters.

and finally an PE (I assume you refer to PE) of 20 is actually very cheap for a biotech stock like VPHM.

Of course this is only my opinion. I could be very wrong.

Mike

Quote from: Michael on January 18, 2006, 03:05:01 PM
Hi Big Dog,

Before I start to abuse you let me just say that I in general like dogs - especially big dogs 

Well I don't know if I would bet my farm on VPHM (or any stock for that matter) but I have earned enough on VPHM to buy a small farm. You might want to do a little DD before you take your final decision on Viropharma.

VPHM does not have any Antobiotics. They have the only known cure for Diff C a bug that is spreading with pandemic speed in the US. As a result of this they have been able to increase the price of Vancocin very significant.

Based on the subscription numbers it seems like the price increases have had no influence on the demand for the drug (hardly surpirsing if you are dying!).

Concerning their pipeline they do actually have a couple of drugs with the potential to be blockbusters.

and finally an PE (I assume you refer to PE) of 20 is actually very cheap for a biotech stock like VPHM.

Mike,

You are one of my favorite posters, and I own some stocks thanks to you.  Being a dog lover just makes it better. 

"Vancocin" is the only product and it is an antibiotic.  From VPHM's website: "Vancocin® capsules is the only antibiotic approved to treat two significant bacterial infections of the lower digestive tract. The product is indicated for oral administration for treatment of enterocolitis caused by Staphylococcus aureus (including methicillin-resistant strains) and antibiotic-associated pseudomembranous colitis caused by Clostridium difficile.

Clostridium difficile ("Diff C" as you call it) is a well known problem medically.  Clostridium difficile is a bacterium that, sometimes during or after antibiotic therapy, can colonize the lower gastrointestinal tract and produce toxins which cause inflammation of the colon and diarrhea.  Healthy people usually do not get C. difficile disease.  Hospitalized patients, particularly those who receive broad spectrum antibiotics, sometimes do, and these are usually elderly patients.  C. difficile infection has become one of the most common nosocomial (spread patient to patient in a hospital) infections.  The U.S. Centers for Disease Control and prevention estimates somewhere between 450,000 to 750,000 cases per year with wide ranges of severity.  Death is a rare result -- diarrehea (albeit a bad case of the sh**s) is the more common result.  So what are we really dealing with?  (1) An antibiotic, though one with an advantage in treating this particular disease.  (2) A disease that does not hit the general population in pandemic fashion and that generally is not a life or death disease  (3) A disease with an appreciable number of cases in hospitals.  (4) A disease that particularly strikes the elderly (and that usually means that pricing power will be limited between Mediwhateveritis and insurance). 

Given that VPHM did not really develop Vancocin, I am skeptical of its very thin pipeline.  In fact, it has only one compound in phase 2 trial (maribavir), and it acquired the rights from GlaxoSmithKline which had been developing it.  I never value a drug company (and this one is a drug company, it is not a biotech company as its products show) based on things in phase one trials (a phase one means only that it is safe to put the compound in the human body - it shows nothing about efficacy).  The product in phase two is for the treatment of CMV retinitis in HIV (+) patients – that may be a good thing, but it is hardly a blockbuster type drug. 

I have done significant DD on this stock.  If I had found it at last May for $2 a share ... yes I might be able to buy a farm now too.  Congratulations to you.  But buying in at $20 is something that will not buy a farm, and given the number of large dogsthat I feed, it probably will not pay for too many of those trips of buying 300 pounds of food at a time!  (the picture is of Molly, one of my five Saints).

Hi Bigdog

Well I better be more polite. Your dogs are bigger than mine 

I think you are a little concervative when it comes to the pipeline. A cure against the common cold might add a little to VPHM's bottom line!

I wrote a little about the pipeline long time ago (not sure the below was what I actually posted!):

QuoteMaribavir is a drug for the treatment of human cytomegalovirus (HCMV) disease. You will probably be surprised to know that you most likely suffer from HCMV.

Cytomegalovirus is a common virus that infects people of all ages and in all parts of the world. In the United States, between 50% and 85% of adults will be infected with CMV by the age of 40. However, in many other countries most people acquire CMV as children or adolescents. Most infections with CMV are "silent," meaning the person infected has no signs or symptoms.

CMV is a real problem for people infected with AIDS, people who's immune system has been suppressed due to organ transplants and for babies who's immune system is not fully developed.

Maribavir was in development by GSK for the treatment of CMV retinitis in HIV+ patients. VPHM acquired the exclusive worldwide rights (excluding Japan) to develop and commercialize maribavir for the prevention and treatment of cytomegalovirus infections related to transplant (including solid organ and hematopoietic stem cell transplantation), congenital transmission (infants), and in patients with HIV infection.

VPHM advanced maribavir into phase 2 clinical trials in patients that have undergone allogenic stem cell (e.g., bone marrow) transplantation in the third quarter of 2004.

It is difficult to estimate the market for Maribavir. The HIV market is obviously the largest but here affordability will be an issue.

The transplant market is smaller but VPHM has focused on this segment. In the U.S. alone, there are approximately 9,000 stem cell transplants, and over 23,000 solid organ transplants on an annual basis.

Finally there is the market for newborns effected with HCMV. Approximately 1% of newborns are infected with CMV. Most of the infected infants will be symptom free; however 10% (about 4,000 infants each year) may have one or multiple abnormalities.

I will not try to put a figure on the revenue potential as it really depends on the side effects of the drug compared to existing drugs on the market (these drugs are quite toxic!!!) but the potential is significant (Higher than Vancocin).

Pleconaril is a cure for the common cold caused by the rhinovirus. I don't think this disease needs any further introduction! According to a 2003 study, the U.S. population suffers 500 million colds a year, at a cost of $40 billion.

Pleconaril works wonders against many, though not all, rhinoviruses. But three years ago, the Food and Drug Administration decided not to approve it, in large part because it seemed to reduce the effectiveness of birth control pills. The new spray seems to resolve this problem and the drug might be on the market as early as next year according to Newsweek.


VPHM has signed an agreement with Schering-Plough and received an initial license fee of $10 million. VPHM will receive further $65 million in Milestone payments when and if certain milestones are reached. VPHM will in addition receive royalties for the sales of the drug.


If anything can spark a real buying frenzy of VPHM's stock it is probably Pleconaril. Here is a story that can sell newspapers and the publicity and excitement will be huge.

HCV796 is a drug against Hepatitis C. It is estimated that there are at least 4 million Hep C patients in the USA with 175 million worldwide. Current treatments cost about $30,000 per year per patient and are very ineffective. HCV796 is only in phase I but the initial results seem very positive. There are several drugs under development against Hepatitis C so it is against difficult to estimate the market for the drug, but it could be as high as $2 to $3 billion (if not higher depending on the worldmarket!)

As mentioned earlier we should start to see news on all three drugs during the 4 month of this year. As always with Biotech stocks the news can be both good and bad. In the case of VPHM I am not so concerned about bad news as it seems like investors are not valuing the stock based on the pipeline but only on the cash flow from Vancocin. Good news on the other hand can really put this stock on fire


The agreement became effective upon HSR early termination. Schering-Plough has paid ViroPharma the initial license fee of $10 million, and will purchase ViroPharma's existing inventory of bulk drug substance for up to an additional $6 million. ViroPharma is also eligible to receive up to an additional $65 million in milestone payments upon achievement of certain targeted regulatory and commercial events, as well as royalties on Schering-Plough's sales of intranasal pleconaril in the licensed territories, if Schering-Plough gains approval for pleconaril.
In November 2003, the two companies entered into an option agreement for intranasal pleconaril. Since then, ViroPharma conducted a series of clinical studies designed to evaluate the antiviral activity, safety and performance characteristics of the intranasal pleconaril formulation. Based on the assessment of these studies, in August 2004 Schering-Plough exercised its option to move forward and enter into a license agreement for the product. The new intranasal formulation of pleconaril represents an optimized delivery approach for this compound, as compared to the earlier oral formulation for which ViroPharma filed an NDA in 2001.

Mike

Hi Big dog

Just looked through the thread again and I now i understand your response. Vaconcin is inded an antibiotic. I didn't want to challenge that. What I wanted to say is that it is not like any other antobiotic as there are no alternatives to Vancocin.

Sorry about that - English is my third language so it sometimes comes out in stange ways!

Mike

Quote from: Michael on January 18, 2006, 04:15:31 PM
Well I better be more polite. Your dogs are bigger than mine 

I think you are a little concervative when it comes to the pipeline. A cure against the common cold might add a little to VPHM's bottom line!

I wrote a little about the pipeline long time ago (not sure the below was what I actually posted!):

Mike,
My dogs eat more too, so I am greatly concerned with making $$$ for chow.     My other posts did not address pleconaril because I think that it is either a scam drug or that it shows that the management of VPHM are world class idiots.  Why do I so say? 

Well, if they had a cure for the common cold, selling it for a pittance (and $65m and royalties would be a pittance for that drug) shows idiocy.  But I do not label them idiots because I do not think we are dealing with a drug with much potential or that will receive approval.  The history on that drug is that VPHM licensed the compound from Sanofi in 1997 (once again, VPHM did not develop anything on its own).  The first indication was for enteroviral meningitis, but that indication was abandoned when the clinical trials did not demonstrate efficacy. In 2001, VPHM submitted a New Drug Application of pleconaril to the FDA for the common cold. The FDA rejected it pretty quickly, saying that VPHM had failed to show adequate safety. 

Michael, you correctly observed that an issue was that it interacted poorly with birth control pills ... but think about it, that is a common issue for every antibiotic (women on antibiotics are always advised to use alternative methods of birth control while on them). 

So what else was going on?     Well, it really does not seem that the drug does that much.  The two trials for pleconaril involved about 2000 patients who self-reported that they had colds.  Half received pleconaril and half a placebo.  Participants self-reported the severity of six cold symptoms (like nasal congestion, cough, sore throat...) daily.  The best the company could say after the study was to talk of "symtom alleviation" and reduction of the "median duration" of symptoms by one day.  In real people terms, the self-reporting by patients was that symptoms went away in 6+ days with treatment and 7+ days with a placebo.  Hardly a cure    and not necessarily anything better than a good dose of vitamin C each day.  The only real science applied – nasal mucus samples were evaluated at baseline and on study days 3 and 6 for picornavirus infection – show that picornavirus infection occurred in 65 percent of self-reported cold victims, and the rate did not differ significantly between placebo and pleconaril groups.

Conclusion.  This drug is a bust.  The FDA has rejected it twice, and it does not come even vaguely close to curing the common cold. 

Lets say I am wrong, and you or someone else believes that the cure for the common cold is here.  Then buy Schering Plough (SGP) – it is a company that has had problems for several years and finally seems to be righting its ship.  It is back in the black – probably earning 37 cents this year and over 50 cents next year, and it has one of the lowest price/sales ratios of the drug stocks. 

I don't know what they did to sharp charts, but I can't save the VPHM chart to post this.... it looks like yesterday (1-18-06) violated the 6 month trend line from the Aug 14 low

http://stockcharts.com/def/servlet/ImageServlet.CServlet?img=appletpage,700~462~vphm%2Cuu%5Bw%2Ca%5Ddaclyyay%5Bdc%5D%5Bpb50%21b200%5D%5Bvc60%5D%5Biub14%21la12%2C26%2C9%5D~~

To me it looks like it has held th elonger trend line from Aug 12 if you look at the weekly. However, It did break its veryrecent trend line from Jan 3 (low was $17.77).  There is a recent secondary trend line from Nov 29 (low was $15.56) from Nov 29 that now intersects at approcx the 50 day.  At $19.71 VPHM sits now just slightly above that trend line and the 50 day moving average. I would say this has a good chance to hold here with perhaps an intraday touch of the 50 day. 

insoder buying 
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=3903169

Quote from: la-onda on January 24, 2006, 04:45:16 AM
insoder buying 
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=3903169

Thanks la-onda, the new director, John Leone, bought 25,000 shares (through the exercise of options) at price $20.43 (higher than yesterday's close). This is to show confidence from the new member on the team he's joining (he invested $510,750, not a small number, I wonder if it was his own money?).

Anyway, the discussion between bigdogs (some valid bearish arguments), Michael (taking some profits around this point) and other members makes me feel I shouldn't hold VPHM for the long term. But, I also don't see a reason to sell immediately.

Based on the chart structure (please, don't ask me what this means  ) I think VPHM will rise to the $24-$25 level this quarter. I'll continue holding the stock.

VPHM: Short Interest UP 0.6% to 5.1M in Jan 2006
Wednesday, January 25, 2006 16:25 ET

According to new short interest data from NASDAQ, short interest for Viropharma, Incorporated (NasdaqNM: VPHM) INCREASED 0.6% to 5,117,496 shares for the month ended mid-January, 2006.

SYMBOL          DECEMBER         JANUARY     CHANGE       %CHANGE  DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
VPHM           5,087,230       5,117,496         +30,266        +0.59%           5

Based on VPHM's 20-day average daily share volume of 1,186,285, it would require approximately 5 day(s) of buying to cover this short interest.

&

ViroPharma to Eliminate Debt
Thursday January 26, 7:30 am ET
- Company Sets Redemption Date for Remaining Convertible Subordinated Notes Due March 2007 -

EXTON, Pa., Jan. 26 /PRNewswire-FirstCall/ -- ViroPharma Incorporated (Nasdaq: VPHM - News) announced that it will take the final step in eliminating its long-term debt by commencing a full redemption of all of its remaining convertible subordinated notes due March 2007. The remaining outstanding principal amount of the 6% notes is approximately $79 million. On the redemption date, March 1, 2006, ViroPharma will pay holders who have not converted their notes into shares of common stock 100.857% of the outstanding principal amount of the notes plus interest accrued to (but excluding) March 1, 2006 as required by the indenture for the notes. After March 1, 2006, interest will cease to accrue on the notes. A notice of redemption explaining procedures for surrendering notes and receiving payment will be sent on or about January 26, 2006 to all currently registered holders of the notes by The Bank of New York, trustee for the notes. Copies of the notice of redemption and additional information relating to the procedure for redemption may be obtained from The Bank of New York by calling (800) 254-2826.


By redeeming the notes early, ViroPharma will reduce its annual interest expense by approximately $4 million over the remaining one-year life of the notes.

Since David apparently has VPHM in his portfolio, some of us can't view that thread. 

Looks like after building quite a base in the 18-21 range, VPHM might be ready to break out.  VPHM was missing the needed volume today, but the volume was strong in the final hour or so.  Everything looks set for a move higher, as far as I can see.  Earnings should be coming up in a month or so, I believe.

Maybe we'll see a little run up? 

Thanks for posting the good news on VPHM la-onda 

ViroPharma to Eliminate Debt

This is a move that I welcome, it prevents dilution of shareholder value in the future, and saves money in interest payments.

VPHM's chart says the stock is getting ready to meet the $24-$25 level soon.

I would like to make the same thinking on VPHM and analysts that shawFund did to me on AOB's thread. There's something strange on analyst's predictions for 2006.

Let's see, for the entire 2005 they expect the company to have a net profit per share of $1.03. If we annualize the past 3 quarters we would have something like $1.04, so everything's normal here.

What I find strange are the predictions for 2006 ... they expect revenue to grow from $128.59M in 2005 to $167.2M in 2006 (30% growth). Yet, when they consider EPS, they expect it to rise from $1.03 to $1.10 (just 6.8%):



If revenue growth is expected to be 30%, why should earnings grow just 6.8%? Only if the cost base increases substantially, but why?

Anyway, with a trailing P/E of 20 I find VPHM attractive here and I'll continue to hold the stock. If we get a close above $21.69 the way is clear for a move up to the next resistance at $24.36.

Hi David,

It seems to me (as said repeatedly in this thread) that the analysts always leave room for the next upgrades every time the upgrade VPHM (now that sounds strange but I hope you get the meaning!).

Vancocin sales are just out and the market likes what they see. VPHM is poised to blast through the analysts estimates with this kind of growth 

Can't help loving this baby