VPHM - Sector: Healthcare---Industry: Biotechnology & Drugs

[LiveLife]

Institutional trading for Monday

[LiveLife]

moving average still looking good

[snowcat]

From Marketocracy today:

Gurus also took profits where they could in biotechnology. Shares of ViroPharma (nasdaq: VPHM - news - people ) are up 653% in the past year and hit a 52-week high of $17.30 on Aug. 26. The Exton, Pa.-based company develops drugs to treat viral diseases. Gurus took advantage of the 70% gain in the past two weeks and sold out of ViroPharma.

Watch for a buying opportunity - but do not let profits slip away.

[fantazia]

In my opinion I would not put much weight into any articles like forbes or what have you, the fundamentals and technicals speak for themselves. VPHM is as strong a horse as you are going to find in this market  , and the beauty is,  its still undervalued!, the market knows this that is why any weakness is met with plenty of buyers.

Good luck to all!

[David Randolph]

Thanks for your posts on VPHM 

I believe fantazia is right, VPHM is one of the strongest horses running on the Nasdaq track.

Investors sold off VPHM today because they were taking severe losses elsewhere and needed to compensate those losses with some big profits, like the one they had on VPHM.

I have made that same mistake some times in the past (here, at 3 Stocks on Fire, trying to keep the portfolio percent gain always on top, I've sold some big winners that just continued trending up after I've sold). This happens when you're working for performance, short term performance.

Anyway, i didn't do it this time, and VPHM made a solid recovery by the end of the session, with volume above average. Perhaps weak hands were cleaned up and now they will have to chase the stock higher or lose it. Nobody wants to lose VPHM, I know how that feels, people who sold today on profit taking, for the wrong reasons, will come back to the stock, adding momentum and attracting even more buyers.

I'm absolutely confident that I've made a wise decision on holding VPHM, but the market has the final word, let's hear what he has to say in the coming trading days.

[AussieTrader]

Thanks for your posts on VPHM 

VPHM made a solid recovery by the end of the session, with volume above average. Perhaps weak hands were cleaned up and now they will have to chase the stock higher or lose it. Nobody wants to lose VPHM, I know how that feels, people who sold today on profit taking, for the wrong reasons, will come back to the stock, adding momentum and attracting even more buyers.

I'm absolutely confident that I've made a wise decision on holding VPHM, but the market has the final word, let's hear what he has to say in the coming trading days.

I agree. Your original buy was fantastic timing, I have added on todays action as it touched the 9ema and recovered.

[LiveLife]

Nice gains today, and a good buy on a pullback yesterday ($1+ gain).

[David Randolph]

I agree. Your original buy was fantastic timing, I have added on todays action as it touched the 9ema and recovered.

Thanks Aussietrader 

No news or technical developments on VPHM yesterday, the uptrend continues pretty much in place. Considering Aussie's comments I've attached the 9 day exponential moving average to VPHM's chart.

[David Randolph]

VPHM is finding a little resistance on the $17.30 level, but I think that resistance will prove to be short lived. The 9 ema is acting as support on VPHM, today it is standing at $16.13.

The uptrend is still in place, I'm confident on this company's fundamentals, I'll continue holding the stock for the foreseeable future.

[Michael]

It seems like the whole forum is out searching for VPHM clones. Why not buy the original?

Below some insight from an interview on August 31 with Frank Baldino Jr, Michel de Rosen and Vincent Milano in The Philadelphia Inquirer.

It seems like even the management is surprised about the explosion in sales of Vancocin. No wonder the stock market was taken with surprise as well!

"Last year, in 2004, we decided to reinvent the company quite radically," chairman and chief executive officer Michel de Rosen said. "It's the same name but nearly everything is new: new strategy, new focus, new products, new building, new people, new management team. The stock price is just one indicator that some people are paying attention."

In late 2003, ViroPharma took a hard look at its research programs still years away from becoming commercial products. "We had a limited amount of cash, and we were spending cash. We saw the day when that cash would be gone," de Rosen said.

Without a product on the immediate horizon, the company began looking to acquire a medicine already on the market, and settled on Vancocin, which was available because Lilly was getting out of the anti-infectives business.

In October, ViroPharma announced it was buying Vancocin for $116 million. The company had $120 million in cash, and raised $62 million to do the deal. "At that time, our market cap, the value of the company, was one-half of $116 million," de Rosen said. "We signed a check that was worth twice the value of the company to buy the compound."

The gamble paid off. Not even ViroPharma could have predicted how rapidly Vancocin sales would grow.

The drug had sales of $40 million in 2003, $54 million in 2004, and sales in the first half of 2005 were $49.9 million - $21.1 million the first quarter and $28.8 million in the quarter ended June 30.

"We envisioned the growth would eventually be at the levels we are enjoying now, but not within eight months of owning the product," chief financial officer Vincent Milano said.

ViroPharma has raised the price of Vancocin by 47 percent, with the latest hike Aug. 16, surprising analysts and sending the stock price soaring 30 percent. Analysts have predicted peak sales potential for the product of $200 million by 2009.

Since May, ViroPharma has used a combination of cash and conversion of other debt into stock to reduce its $200 million debt by 57 percent, to $86.7 million.

"Six months ago, investors were worried about how ViroPharma was going to pay back this debt," Milano said. "Today, people aren't worried. We have demonstrated we have an ability and a discipline to deal with the debt, and there is confidence in the company that we'll keep doing that."

Frank Baldino Jr., CEO of Cephalon Inc. and a ViroPharma board member since 1995, said ViroPharma "really did reinvent themselves. It's been a great turnaround."

"You have to hand it to Michel de Rosen and the team for staying through the tough times and for making the tough decisions to get them out of trouble," he said.

In the first half of this year, Vancocin prescriptions increased 45 percent because doctors are seeing an increase in the bacterial infection, known as Clostridium difficile-associated disease or CDAD, that Vancocin treats, Lazard Capital Markets analyst Joel Sendek said in an Aug. 3 research report.

In 1992, doctors reported fewer than 5,000 U.S. cases of CDAD, and in 2002 they reported 164,000. And doctors are seeing a more virulent strain of the bacteria, Sendek said.

........

"We are actively working on other business development opportunities," de Rosen said. "We hope that, in the coming 12 months, we could announce one or two deals."

Wondering what other deals they are working on. They certainly know how to make a good deal.....

[David Randolph]

Thanks for the fundamental info Michael, we really need «one or two more deals» to get VPHM on its way to $48.

For now it looks like the stock found some short term resistance at the $17.30 level. As support we have the 9 ema that today will stand at $16.21, hopefully we'll see some bounce from that level.

Considering the impact of the $17.30 resistance, we need to trust RULE 45 that says the following:

Bear markets have no supports and bulls markets have no resistance

There's no way I'm going to lose on this trade (I bought the stock at $9.89), now I'm going to let the market tell me how much is enough, not my personal judgment.

[David Randolph]

VPHM is still resting a bit below this new found $17.30 resistance level. The 9 day ema stands at  $16.33. I'll continue holding VPHM, I'm positive the stock will soon push higher again.

[REALDEALS21]

It has broken resistance ! NICE !

[tommyt]

Very solid breakout, 18.03 in afterhours

[Michael]

Hi Tommyt,

Indeed a nice breakout. It seems like the analysts are finally finished looking at the IMS numbers for August. You should see another pop-up when they release their updates (if they update at this point in time)

Piper Jaffray expected an 8.4% decline of Vancocin Sales in Q3 compared to Q2. The August sales were only down 2 compared to July according to IMS so it seems like JP's EPS has to be revised significantly up as expected (with $0.20 to $0.25).

There has been a lot of talk about the sales of Vancocin not being affected by seasonality (as we have not seen the sale drop during summer). I don't think that is the case. I believe that what we are seeing is a rapid spread of C-difficile and that you will have the normal increase in sales during winter just from a higher level.

Let me show a couple of graphs: