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

[Lucas Scott]

One thing I believe, I think Michael hates this stock now @ this point of time

Probably the case! At least Michael's still in the black on the shares he bought at $4.50, so he probably doesn't hate the stock as much as all the people who bought in the high teens or low 20's.

VPHM is a case study for those who say TA trumps FA. Stict adherance to TA gets you out of this stock somewhere north of $16. FA has you buying VPHM all the way down. 

[Terliso]

At least VPHM is just hovering above the EMA200 on the weekly chart, if it's breaks that, it will go down below 6 and i think that's not gonna happen...i'll be watching VPHM from here & I'll take position in the LONG side if it price stays above EMA200

** MACD divergence fast line still below of slow line ---BEARISH
** ADX still on top of both lines -- VPHM still needs to cool off
** Minus DI(13) turning up -- BEARS IN CONTROL, no buying for me
** Plus DI(13) turning below - BULLS starts dissipating last november even though the price is going up ADX is turning down, that's the other sign for traders to take profits out of the table.

[la-onda]

VPHM: US Bancorp Cuts to Mkt Perform from Outperform; Cuts Tgt to $13 vs $24; Analyst Notes
Monday , March 20, 2006 07:19 ET
Issuer: Viropharma, Incorporated (NasdaqNM: VPHM)
Analyst Firm:  U.S. Bancorp Piper Jaffray
Ratings Action: DOWNGRADE
Current Rating: Mkt Perform (from Outperform)
Target Price Action: DECREASE
Target Price: $13.00 (-45.83% from $24.00)
Analyst Comments: The firm lowered their recommendation citing expectations that Vancocin generics may happen sooner than expected and the consequent impact on cash flows.

&

VPHM: SG Cowen Cuts to Underperform from Outperform; Analyst Notes
Monday , March 20, 2006 08:01 ET
Issuer: Viropharma, Incorporated (NasdaqNM: VPHM)
Analyst Firm:  SG Cowen & Co.
Ratings Action: DOWNGRADE
Current Rating: Underperform (from Outperform)
Analyst Comments: The firm based their downgrade on the FDA's policy change regarding Vancocin generics resulting in potential for increased competition.

up in premarket

[ncham]

07:43  VPHM ViroPharma: Thomas Weisel comments on generic concerns (10.85 )

Thomas Weisel notes that late last week, VPHM shares dropped 38.9% due to concerns of earlier than expected generic competition for Vancocin. They note that on Friday, VPHM stated that the Office of Generic Drugs confirmed a change in requirements for a waiver of in vivo bioequivalence testing for Vancocin. Firm says such a waiver would allow a generic manufacturer to possibly get a generic Vancocin approved without conducting full clinical trials. If a generic manufacturer only needed to conduct simple dissolution studies, they believe the path to a generic Vancocin approval is shortened, but still substantial. Assuming the transfer of manufacturing know-how, dissolution testing, stability testing and FDA review, they believe 2009 would be the earliest that a generic Vancocin could be approved. Given the increased uncertainty regarding the timing of a generic Vancocin approval, they believe VPHM should trade at a discount to its peers. They believe that the current discounts are unjustified, however, as the price seems to account for the definite approval of a generic Vancocin in the relative near-term, which they do not believe to be the case.

[la-onda]

just FYI:

http://www.thestreet.com/_yahoo/markets/analystsactions/10274495_2.html


1)
Viropharma downgraded at Cowen: VPHM was downgraded to Underperform, SG Cowen said. Company will not win Vancocin case, and the stock could further fall down to $5-$6 a share.

2)
Viropharma downgraded at Piper: Piper said it is downgrading VPHM to a Market Perform rating due to concerns over generics.

How can an analyst say that this stock could fall to $5-$6 when the company has $4/share in cash and over $5/share in assets?!?!?!?! Very strange imo

I have added more!
why:
personally I don´t think that any potential generic will enter the market before end of 2008 or beginning 2009!

VPHM has no debt, and other drugs in the pipeline...

cheers
O.

[Lucas Scott]

Viropharma downgraded at Cowen: VPHM was downgraded to Underperform, SG Cowen said. Company will not win Vancocin case, and the stock could further fall down to $5-$6 a share.
...
How can an analyst say that this stock could fall to $5-$6 when the company has $4/share in cash and over $5/share in assets?!?!?!?!

Sounds like a grudge-downgrade. Cowen is "smiting" VPHM. Warranted or not, I think that downgrade will help push the stock below $10.

Would really love to get Michael's take on this.

[ncham]

ugh. no bottom in sight.

[la-onda]

update:

VPHM10.03, -0.82, -7.6% continued its downward slide, declining 5% to $10.36. Cowen & Co. analysts downgraded the stock to underperform, citing a recent change in FDA policy that could speed up the approval process for generic formulations of the company's lead drug, Vancocin. Cowen now sees generic versions of Vancocin being approved by the FDA as soon as mid-2008.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B904B7670%2DAEF5%2D476B%2D9A48%2D0A6A834BEBB1%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo&print=true&dist=printTop

[[D] Investor]

This stock is mind boggling! It went below $10 for awhile today but seems like it's bearish and testing $10 at this moment.

Anyway, I'm out this morning with VPHM at $10.90 for a 1% gain. VPHM did not rebound with the momentum as I had anticipated at market open and met strong resistance at the 20 and 50 DMAs.

The downgrade by Piper Jaffray today did not help VPHM recover either.

Instead, I took a risky move and shorted VPHM at $10.50 (Yes I shorted and you may call me a hypocrite  ) and bought back at $10.00 for a +4.8% return. Since VPHM broke below $10, it seems likely that VPHM will fall even further, but I'll be conservative and stay away from VPHM for awhile until the action simmers down and a clear trend is established. I'm still confident that VPHM will recover sometime in the near future though...

Good luck to all who are both long and short on VPHM! 

[la-onda]

http://www.zacks.com/blog/post_info.html?g=6#716

ViroPharma – One Wild Ride!

Posted Mon Mar 20, 09:15 am ET
by Jason Napodano, CFA

ViroPharma (VPHM) shares define the term volatile so far in 2006. Back in January we
downgraded the name from HOLD to SELL based on fears of generic competition.
We also believe that the Street under-estimated the competition from novel
drugs in mid-to-late stage development. Insider selling has been suspiciously
high over the past few months – yet another reason we advised clients to get out of the stock in January at $21. We reiterated that SELL call in early March after the company reported fourth quarter and full-year 2005 financial results. Again, we made the call at $21.

Here we are just over two weeks after we reiterated our SELL rating and the stock is below $11 – down 45%! In the blink of an eye the generic risk which we've been speaking about for the past three months has taken center stage. In
a very surprise move on Friday, the FDA announced it would entertain the idea of streamlining the filing process for generic Vancocin – ViroPharma's one and only approved product. The shares tumbled 33% on the news.

In our previous sell report we noted that generic Vancocin would be both complex and expensive to make for a generic company. That is still the case. Nevertheless, the risk existed that a generic would be on the market by 2010. Now it seems as though that risk has moved forward by a year. Yet, this is all still highly speculative and ViroPharma will no doubt petition the FDA on the contrary. So, call us crazy, but we think the shares are attractive now at $11.

We have not made any changes to our 2006-2009 financial model. This is a company that will generate significant cash flow over the next several years. Phase II data on CMV candidate Maribavir are expected any day now. Management's plan to acquire one or two drug candidates this year should help diversify the company for the long-term.
In our previous report we noted that we were sellers at $21 and buyers at $12. We still see fair-value in the mid-to-upper teens. Buckle up ViroPharmaians, this is when the ride starts to get interesting!

[la-onda]

http://www.knobias.com/individual/public/news.htm?eid=3.1.d6bcae9d7993afd43ddd3c849047200165862e66bd5d9f2e6c7c9bd1454a7079

VPHM: JMP Sec Keeps @ Mkt Outperform; Cuts Tgt to $15 vs $26; Analyst Notes
Monday , March 20, 2006 10:35 ET

Issuer: Viropharma, Incorporated (NasdaqNM: VPHM)

Analyst Firm:  JMP Securities

Ratings Action: REITERATION

Current Rating: Mkt Outperform

Target Price Action: DECREASE
Target Price: $15.00 (-42.31% from $26.00)

Analyst Comments: VPHM has confirmed investor concerns that the Office of Generic Drugs (OGD) at the FDA had changed its stance on the data required for approval of generic Vancocin. Previous guidelines had indicated that a generic version of Vancocin would need to demonstrate equivalence to the original drug in clinic trials. The firm points out that the OGD's new stance is that dissolution tests are sufficient measures of equivalence for approval. At a time when the government and the media are highlighting the need for increased vigilance in treating serious infections, they believe that OGD may have underestimated the rigor needed to guarantee a truly equivalent generic version of Vancocin. While they do not expect an immediate resolution, they doubt that the new OGD stance will stick. If the OGD reverts to its original guidance, they believe Vancocin will enjoy exclusivity until at least 2010.

[[D] Investor]

It's interesting to note that if the generic drug comes out 2009-2010 (no FDA fast track) VPHM is a $20+ stock. And when it comes out a year earlier in mid-2008, it becomes a $10 or less stock... more than 50% price reduction! Simply astounding... 

[Lucas Scott]

I've tried 4 daytrades on VPHM this morning -- 2 long and 2 short. They netted out to a loss of $12 LOL. Substantiates my theory that daytrading is for idiots

[la-onda]

ViroPharma's Generic Discount

http://www.fool.com/news/mft/2006/mft06032004.htm

By Rich Duprey (TMF Cop)
03/20/2006

Did you feel that downdraft? Whoosh! That gale force wind was created by tiny biotech ViroPharma(Nasdaq: VPHM) falling off the cliff and plummeting 33% on news that generics may be allowed to enter its antibiotic drug market sooner than expected.

ViroPharma's sole source of revenues is the drug Vancocin, which it bought the rights to in 2004 from Eli Lilly(NYSE: LLY) for $120 million. Not a bad deal, really, when you consider that sales in 2005 for ViroPharma were $126 million. Although it was still required to pay some royalties to Lilly, they were relatively negligible.

There's big demand for Vancocin, an antibiotic which treats enterocolitis (an infection and inflammation of the intestine that usually develops in a hospital setting). Sales are expected to continue their expansion -- they've grown at a compounded rate of 65% for the past three years -- since the bacterium already kills thousands of people each year in the U.S., and it's apparently growing more common and deadly. A supervirulent strain -- which generates 20 times more toxins that damage the colon than the typical strain -- has been reported in at least 14 states and several countries.

The fear of this widely spreading bacterium has allowed ViroPharma to raise prices of Vancocin by 80% since it acquired the rights to it. While $800 for the complete regimen compares favorably to other infection antibiotics that cost as much as $2000, it's expected that ViroPharma could increase the cost by another 65% and still be considered reasonable. That has been fueling the growth in ViroPharma's stock, which has risen by more than 500% over the past year.

Yet it's also possible that the price increases played a role in the FDA's decision to allow generics to move into the market ahead of schedule. The FDA recently informed ViroPharms that the regulatory agency had revised its policy of requiring clinical trials showing the efficacy of possible generic alternatives; in the future it will merely require companies to show that lab tests of generics produce the same rate of dissolving as Vancocin does. Vancocin is the only FDA-approved oral drug of vancomycin that is delivered intravenously and specifically targets the bacterium that causes the infection.

Because of the cost factor, some doctors prescribe off-label treatments using metronidazole, which is less than one-tenth the cost of Vancocin. Yet the off-labels are not nearly as effective, nor can they treat the more severe cases of infection.

While it's difficult to imagine the FDA actually going through with this lesser standard of proof -- especially considering the heat that it's taking over its handling of Merck's (NYSE: MRK) Vioxx and Pfizer's (NYSE: PFE) Celebrex -- investors were concerned enough about the possible early entry of generics to whack $5 off ViroPharma's share price, which had followed a 9% decline the day before. The stock is more than 55% off its 52-week high, which piques my interest here.

The company has $233 million in cash, only $79 million in debt, and is trading at a little over two times its book value per share. It has a trailing P/E of only 5 and a forward P/E of just 8, and the company was finally able to become profitable in 2005, on the strength of Vancocin. Generics, if they're ever even approved, will not appear on the market for at least two years, and ViroPharma has announced its intention to vigorously defend its patents. Considering the hypervirulency of the new bacteria, it seems unlikely that the FDA would follow through.

Moreover, while Vancocin is the biotech's sole product right now, it has two other drugs in its pipeline: Maribavir, which it acquired from GlaxoSmithKline(NYSE: GSK) in 2003, is used to treat cytomegalovirus, a common virus in the herpes family that is found worldwide; and HCV-796, with which it entered into a partnership with Wyeth(NYSE: WYE) in 1999 to target hepatitis C. Considering the amount of cash it has on hand from Vancocin, it could also always buy into another cash-producing drug -- should generics prove formidable.

The sell-off is definitely overwrought here, and investors would do well to look a little closer at this promising biotech.

GlaxoSmithKline, Eli Lilly, and Merck are Motley Fool Income Investor selections. Pfizer is a Motley Fool Inside Value selection.

[Jimbo]

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.

I managed to buy some shares at $9.75 as I believe there is a support around $9.76 and we might see a bounce from that level. But definitely will be tight on my stop - sell if close bellow $9.76 without regrets 

One thing I believe, I think Michael hates this stock now @ this point of time

Probably the case! At least Michael's still in the black on the shares he bought at $4.50, so he probably doesn't hate the stock as much as all the people who bought in the high teens or low 20's.

VPHM is a case study for those who say TA trumps FA. Stict adherance to TA gets you out of this stock somewhere north of $16. FA has you buying VPHM all the way down.

We still waiting for Michael..........................................