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Analyst Blog

ViroPharma Incorporated recently provided guidance for 2013. ViroPharma expects net product sales between $450 million and $475 million in 2013 on a worldwide basis.  Cinryze sales are expected in the range of $390 million - $400 million in North America.  

ViroPharma expects sales from its key product Cinryze to come around $321 million in 2012, towards the lower end of the company’s previously announced guidance of $320 million – $335 million. Approximately $311 to $312 million of total Cinryze sales was attributed to actual patient demand while an increase in channel inventories accounted for the remainder. 
 
ViroPharma expects channel inventories to return to normal levels in the first quarter of 2013.
 
Meanwhile, the commercial launches of Cinryze, Buccolam and Plenadren in Europe are gaining traction and will contribute to top line growth in the coming years. 
 
ViroPharma is also upbeat about its pipeline. The company and partner Halozyme Therapeutics initiated a phase IIb study in late December to evaluate the safety and efficacy of a subcutaneous administration of Cinryze in combination with Halozyme's Enhanze technology. 
 
ViroPharma projects research and development (R&D) and selling, general and administrative (SG&A) expenses to come around $240 - $260 million in 2013. 
 
We expect the company to meet its target in 2013 driven by the continued success of Cinryze.  However, we note that Vancocin has been the major growth driver for the company in the last few years. Although the prospects for Cinryze look bright for ViroPharma, we remain concerned about the company’s dependence primarily on Cinryze for growth. we remain concerned about the decline in Vancocin sales due to increasing generic competition. 
 
Hence, we prefer to be on the sidelines as of now and have a Neutral recommendation on ViroPharma which carries a Zacks #3 Rank (Hold). Pharma stocks which currently look attractive are Valeant Pharmaceuticals International Inc. and Ironwood Pharmaceuticals, Inc. which carry a Zacks #1 Rank (Strong Buy). 

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