ViroPharma 3Q profit falls on deal costs

ViroPharma Inc. said Thursday its profit fell 26 percent in the third quarter on costs related to drug development and licensing agreements, and the costs of marketing its drug Cinryze.

ViroPharma said its profit declined to $28.2 million, or 35 cents per share, from $38.3 million, or 45 cents per share, one year ago. Revenue increased 21 percent, to $143 million from $117.8 million.

Analysts expected the company to report a profit 33 cents per share and $130.7 million in revenue, according to FactSet.

Sales of Cinryze grew 33 percent to $65 million in the third quarter. European regulators approved the drug in June and ViroPharma began selling it in Germany during the quarter. The drug is used to prevent or treat hereditary angioedema attacks in adults and adolescents. Hereditary angioedema affects at least 10,000 people in Europe. Patients with it can experience unpredictable and potentially deadly swelling attacks that can affect the larynx, abdomen and face.

Cinryze is delivered intravenously. In May, ViroPharma entered a partnership with Halozyme Inc. to develop an injectable version of the drug. That drove up ViroPharma's research costs, and the company also entered a partnership with Intellect Neurosciences to study a treatment for a condition called Friedreich's Ataxia, a rare disease that damages the nervous system.

ViroPharma said its research and development costs more than doubled to $22.9 million in the quarter. Its marketing costs also rose after it launched Cinryze in Europe and began new programs to market the drug, which was already approved in the U.S.

Sales of the company's antibiotic Vancocin grew 13 percent to $76.6 million. Vancocin is used to treat antibiotic-associated gastrointestinal infections.

The company also said Thursday that it agreed to buy DuoCort Pharma AB, a Swedish company that is developing a treatment for adrenal insufficiency, a hormone disorder that is also called Addison's disease. ViroPharma agreed to acquire DuoCort for 220 million Swedish kroner ($33.6 million) upfront, and the deal also includes potential payments of up to 860 million kroner ($131.3 million) based on manufacturing and sales.

European Union regulators recommended approval of DuoCort's drug Plenadren in July, and the company expects marketing approval in the fourth quarter of 2011. Adrenal insufficiency can cause weight loss, muscle weakness, fatigue, and low blood pressure. It is caused by low levels of the hormones cortisol.

Shares of ViroPharma fell 23 cents to $19.73 in afternoon trading.