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

[la-onda]

update3:

DJ UPDATE:ViroPharma Dn;Concerns For Faster Vancocin Generic    

03/17/2006
By Alex Davidson
NEW YORK (Dow Jones)--ViroPharma Inc. (VPHM) shares fell as much as 30% over the past two days as Wall Street weighed the possibility that a generic competitor to ViroPharma's antibiotic to treat gastrointestinal infections could come on the market sooner than expected.

Speculation about the timing of a generic rival to ViroPharma's Vancocin oral antibiotic began Thursday as Infinium Capital analyst Bernadine Leung said in a research note that a generic competitor could be introduced one-to-two years earlier than expected.

She said the timing of the introduction of a generic changed because a Food and Drug Administration working group formed specifically around Vancocin decided in February that clinical trials for a generic may not be necessary if it is found the generic dissolves at the same rate as Vancocin.

Leung said that based on the latest comments from the FDA, a generic could come to market as soon as late 2008. Most didn't expect a generic before 2010. The analyst said she still believes that Akorn Inc. (AKN) and India's Cipla Ltd. are developing a generic version of Vancocin. "The manufacturing process for Vancocin is particularly complex and in the past, when sales were much lower, served as a sufficient barrier to generic competition. However, now that Vancocin sales have increased significantly, we believe that it will only be a short time before a competitor is able to manufacture their own version of the drug," Leung said in a Thursday research note. Officials at ViroPharma and the Food and Drug Administration were not immediately available for comment Friday, but the company issued a press release that said the FDA's Office of Generic Drugs, Center for Drug Evaluation and Research "may have changed its approach regarding the conditions that must be met in order for a generic drug applicant to request a waiver of in vivo bioequivalence testing for Vancocin."
The company said this position deviates from its original understanding of the Office of Generic Drugs' practices that had required clinical studies for such a generic rivaling Vancocin to come to market.

"We strongly disagree with both the manner in which this change in approach was developed, as well as the substance of the approach which ignores the need to demonstrate bioequivalence for a non-systemically absorbed drug. We will vigorously oppose at FDA this attempt to radically restrict the data on which FDA would make vancomycin capsule bioequivalence decisions."

Wall Street said the FDA has now offered contradictory statements about bringing a generic of Vancocin to market, initially saying that clinical trials would be necessary and now, apparently, reversing that statement.

Lazard Capital Markets analyst Joel Sendek said Friday that he does not think the Food and Drug Administration will ultimately allow the approval of a generic Vancocin based on dissolution studies rather than clinical trials.

"While there is technically a process through which bioequivalence may substitute for clinical trial data, we view such a route to be risky and less rigorous than the clinical trial route for a drug that addresses a disease that is increasing in both incidence and severity."

Piper Jaffray analyst Thomas Wei said in a research note Friday that if a generic version of Vancocin comes onto the market before 2010, "we may have to re-evaluate our investment thesis on VioPharma."

ViroPharma shares recently traded at $13.20, down $3.04, or 18.7%, on volume of 23.3 million shares, compared with average daily volume of 1.6 million shares. Earlier Friday, the stock traded down as much as 24% to $12.40.

On Thursday, shares dropped 9%.

ViroPharma's stock has been volatile based on prospects for Vancocin and likely generic rivals. On Nov. 10, the company's shares shed 18% on concerns about generic competition; while on Sept. 15, ViroPharma's shares rose 11% after Piper Jaffray raised its price target on the company's stock.

Additionally, within a six-month time span between May 2 and Nov. 7, the company's stock rose from its 52-week low of $1.67 to a 52-week high of $24.36.

Leung does not own shares in ViroPharma, and Infinium does not have any conflicts with company. Sendek could not be reached to determine if he owns shares in ViroPharma. Lazard Capital Markets has an investment banking relationship with ViroPharma.

-By Alex Davidson, Dow Jones Newswires; 201-938-5394; [email protected]

[Loffigus]

I so badly want to buy some shares at this price, but with my luck, the second I do, it will plunge another $1.00 

[la-onda]

update part4:
ViroPharma Further Comments on Vancocin
PR Newswire - March 17, 2006 14:55

EXTON, Pa., March 17, 2006 /PRNewswire-FirstCall via COMTEX/ -- ViroPharma Incorporated (Nasdaq: VPHM) today filed a Petition for Stay of Action with the FDA regarding the requirements for waivers of in-vivo bioequivalence testing for Vancocin. ViroPharma expects to make additional filings in support of its vigorous opposition to any approach that does not require rigorous scientific methods to demonstrate a rate and extent of drug release to the site of action consistent with good medicine and science. The company believes that, given the growing number of patients with severe, and possibly life-threatening, C. difficile-associated disease, the appropriate expert advisory groups must validate the scientific and medical appropriateness of the approval standards for a generic locally acting vancomycin capsule product.

ViroPharma earlier today commented that it had been informed that the Office of Generic Drugs, Center for Drug Evaluation and Research ("OGD"), may have changed its approach regarding the conditions that must be met in order for a generic drug applicant to request a waiver of in-vivo bioequivalence testing for Vancocin. In a discussion with the Company today, OGD has confirmed this change in approach.

C. difficile is a bacterium, which under certain circumstances, typically after antibiotic therapy, can colonize the lower gastrointestinal tract where it may produce toxins which cause inflammation of the colon and diarrhea, and the associated complications of disease, including death. Advanced age, gastrointestinal surgery/manipulation, long length of stay in healthcare settings, a serious underlying illness and compromised immunity are conditions associated with increased risk of disease. According to the CDC, there are approximately 3,000,000 cases of antibiotic-associated diarrhea per year, of which 15 to 25 percent are caused by C. difficile.

[rickjust]

I so badly want to buy some shares at this price, but with my luck, the second I do, it will plunge another $1.00

hi,

patience ...............looks very volitile still. looks like there will be plenty of good entry points down the track .
maxi

[Loffigus]

Yea, I am not going to try and catch this falling knife- - this could just be day 1 of it's drop.
this stock is not safe for the time being.

[Loffigus]

This has been a great lesson in why to use Stops.  I bought yesterday at 17.27 and my stop triggered at 16.17

And I thought I lost big!  It's amazing how much easier stocks will fall, than they rise.  Lesson Learned!

[[D] Investor]

VPHM is indeed on "fire" today. It has fallen below $12! Very intersting development... I'lll just keep watch on the sidelines...

ViroPharma Falls on Vancocin Anxiety
Friday March 17, 12:45 pm ET
ViroPharma Shares Fall Over Uncertainty of FDA Stance on Generic Vancocin

NEW YORK (AP) -- Shares of antibiotics company ViroPharma Inc. fell Friday on concern over the possibility that the Food and Drug Administration may allow drug makers an easier path to sell a generic version of the company's major revenue driver.

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ViroPharma shares fell $3.19, or 20 percent, to $13.05 in midday trading on the Nasdaq at more than 10 times their average volume. Shares have climbed from a 52-week low of $1.67 in April to a 52-week high of $24.36 in November.

Vancocin sales accounted for $125.9 million of the company's $132.4 million in total revenue in 2005. The company bought U.S. rights for Vancocin from drug maker Eli Lilly & Co. in 2004 for $116 million plus royalties. Vancocin is an antibiotic for treating inflammation of the intestines.

ViroPharma acknowledged in a statement hearing that the FDA's Office of Generic Drugs may be changing its approach for establishing bioequivalence for Vancocin. The company has yet to confirm the change directly with the FDA, but said it will fight the change if it does materialize.

Piper Jaffray analyst Thomas Wei, who rates ViroPharma an "Outperform," considers news coming out of the FDA about the possibility of generic Vancocin mixed and contradictory.

On the one hand, the agency has stated that clinical trials would be required to show that a generic version of Vancocin was similar to the branded one, an expensive and unprofitable proposition for a generic drug maker.

On the other hand, Wei said that recent panel meetings on gastrointestinal drugs have suggested the possibility that much simpler studies could be used to show bioequivalence of highly soluble, rapidly dissolving drugs like Vancocin. Wei noted that even if simpler studies were allowed, the drug is difficult to make.

"Nonetheless, the elimination of the requirement to run large clinical studies could substantially shorten the time line to generic Vancocin approval," Wei said in a research note.

Lazard Capital analyst Joel Sendek, who rates the stock a "Buy," was more skeptical of the easier path. While the FDA indicates the possibility that bioequivalence data could be used in place of clinical trial data, Sendek told investors he views the easier route as a risky proposition given the increasing incidence and severity of GI infections.

[Jimbo]

filling the gap from August?

Se7en,

hopefully not, but if that's case there still a way to go (down   )


Anyway, there is a support around $13.40 but if that doesn't hold the next one is around $9.70.

Wow............


Gap already filled.

This has been a great lesson in why to use Stops. I bought yesterday at 17.27 and my stop triggered at 16.17

And I thought I lost big! It's amazing how much easier stocks will fall, than they rise. Lesson Learned!

I totally agree with you, Loffigus

they intend to fall much quicker then rise, unfortunately.

[Lucas Scott]

What carnage! I sold in the low 13's and immediately went short. I didn't know if going short was a smart move but I wanted to make something back and it didn't look like that was going to happen by being long. Covered at 10.99. Happy to make back a chunk of my loss so quickly. Next time, stops!  Updated chart of VPHM below.

As I type this I see I should have held my short a little longer...

[la-onda]

update part 5:

68M shares outstanding
49M shares traded!!!!!!!!!!

Potential Generic Competition Sends ViroPharma Shares Lower - Touching Fresh Bell-to-Bell Bottom
Friday , March 17, 2006 15:44 ET

Boston, Mar 17, 2006 (MidnightTrader via COMTEX) -- VPHM is recently touching a fresh bell-to-bell bottom as worries spread over the increased potential for generic competition to the company's Vancocin instestine inflammation treatment.
VPHM earlier today commented that it had been informed that the Office of Generic Drugs, Center for Drug Evaluationand Research (OGD), may have changed its approach regarding the conditions that must be met in ordThe company tried to soothe some of the anxiety by issuing a statement late this afternoon.
VPHM said it filed a Petition for Stay of Action with the FDA regarding the requirements for waivers of in-vivo bioequivalence testing for Vancocin. The company "expects to make additional filings in support of its vigorous opposition to any approach that does not require rigorous scientific methods to demonstrate a rate and extent of drug release to the site of action consistent with good medicine and science. The company believes that, given the growing number of patients with severe, and possibly life-threatening, C. difficile-associated disease, the appropriate expert advisory groups must validate the scientific and medical appropriateness of the approval standards for a generic locally acting vancomycin capsule product," it said.

VPHM earlier today commented that it had been informed that the Office of Generic Drugs, Center for Drug Evaluation er for a generic drug applicant to request a waiver of in-vivo bioequivalence testing for Vancocin. In a discussion with the company today, OGD has confirmed this change in approach.

short info:
http://www.shortsqueeze.com/index.php?symbol=vphm&submit=Enter


Monday will be interesting......

[Lucas Scott]

VPHM is indeed on "fire" today. It has fallen below $12!

On fire indeed! Like victims of the Salem Witch Trials or the Spanish Inquisition.

[ScottishTrader]

ugh.  I feel sick.  I guess my 13.32 buy wasn't so hot after all.  am in the soup almost 20% on that alone!!!

Well, looks like I'm gonna sit on this one for a bit then.  Am sure VPHM must correct in the next month or so to a fair value.  The news was bad, but not this bad!  Doesn't affect their current or forward revs for at least another few years, nor their pipeline.  Don't see how it could go completely down the toilet!!

Just ridiculous!  But glad to see you made a bit on your short Lucas, I wonder if Melf Elf was still short

[Jimbo]

Hmmmm.... my last message was too cheap so let me elaborate a bit.

VPHM's forward PE is 17.26.

They will be debt free in the coming months

They are growing earnings at a rate that leaves big pharma's in the dust.

They have a quite interesting pipeline with one drug that has just been given fast track status

and you are selling 

VPHM only has one problem. It has increased too fast over too short a time.

Show me any other pharmaceutical company that has this kind of track record, pipeline, PE etc. and I will be on the buying side. (I will however also still buy more VPHM - these kind of opportunites don't show up too often!)

Mike

Michael,


I know you was going to add more shares at $18-$19 so after today's sell off VPHM should be even more attractive, right?


Since you like the company a lot I really would like to see your take when everyone else hates it.




Thanks

[basonista]

We had a picture perfect 61.8% fib bounce today at $10.35. Too early to tell if that is the bottom but it can't be a coincidence that buying was so strong at that level.  Last AH price is $11.30.

[Lucas Scott]

Melf covered in the mid-18's after going short at $21. Would have been quite the payday for him if he'd held on to his short.

I think we'll see 13.32 again soon unless it collapses a lot further on Monday. Remember SUF dropped from 19.50 to under 7.00 in just two days, then got a 3-day bounce to take it back over 11.00.  Maybe VPHM follows a similar pattern. I'll have VPHM on screen all next week. I got back about 40% of my loss today with my short. I want to get back a piece of that remaining 60% if we see a strong bounce.