VPHM Manufacturing Process Approved

The US Food and Drug Administration (FDA) recently approved ViroPharma Incorporated’s (VPHM - Snapshot Report) supplement to the Cinryze Biologics License Application (BLA) for industrial scale manufacturing changes. ViroPharma expects to complete labeling of earlier produced vials, six weeks before entering the market.

Notably, ViroPharma submitted a prior approval supplement (PAS) in the second quarter of 2010. The PAS involved this industrial scale manufacturing project to increase Cinryze production capabilities. In respond to this, the FDA issued a complete response letter (CRL) in October 2010 requesting additional information from the pre-approval inspection and review of the technical process. In February 2012, the FDA issued another CRL regarding this.

The approval of the supplement for industrial scale production will ensure that enough Cinryze is available for prophylactic use for patients with HAE.

We note that Cinryze (intravenous formulation – IV) is approved both in the US and Europe. In the US, the drug is approved for routine prophylaxis against angioedema attacks in adolescent and adult patients with hereditary angioedema (HAE).

In Europe, it is approved for routine prevention, pre-procedure prevention and acute treatment of angioedema attacks in adolescent and adult patients with HAE. As per company sources, there are around 6,500 people in the US and around 10,000 people in the EU suffering from HAE.

ViroPharma also received bad news recently on a study of Cinryze. Earlier this month, the FDA stated that the phase II study evaluating the combination of subcutaneous Cinryze and Halozyme Therapeutics’ (HALO - Snapshot Report) recombinant human hyaluronidase enzyme (rHuPH20) should be put on temporary clinical hold.

The FDA’s Center for Biologics Evaluation and Research (CBER) division informed the companies that the US regulatory body is assessing the potential risk of the long-term effect of anti-rHuPH20 non-neutralizing antibodies associated with the use of Halozyme's rHuPH20. The FDA detected some risks pertaining to rHuPH20 in a separate study without Cinryze.

The US regulatory body also mentioned that the problems are not specific to Cinryze and ViroPharma can continue evaluating its subcutaneous administration of Cinryze without rHuPH20. ViroPharma intends to inform European regulatory authorities of the FDA’s action.

The biopharma company has also decided to postpone its enrollment process in Europe for the phase II combination study of Cinryze and rHuPH20 until the FDA provides an update on the safety of the latter. We believe that the study halt is a major set back for the company.

ViroPharma recorded Cinryze sales of $68 million in the first quarter of 2012.

Our Recommendation

We believe that the approval of the industrial scale manufacturing expansion process can be a major growth driver for ViroPharma. Though the halting of the combination study of Cinryze and rHuPH20 will keep the company concerned. We currently have a Neutral recommendation on ViroPharma. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

ViroPharma will be reporting its second quarter financial results on August 9, 2012. We are expecting net sales of $104 million for the second quarter.