By Karen Young
Anticipating the approval of Picovir, its common cold antiviral, ViroPharma Inc. entered an agreement to sell 4 million shares of common stock in a deal expected to generate $82.8 million in gross proceeds.
Morgan Stanley acted as sole underwriter in the transaction, in which shares were sold to Morgan Stanley at $20.70 per share. ViroPharma¿s stock (NASDAQ:VPHM) fell $2.39 Thursday, or 10 percent, to close at $21.35.
As of Sept. 30, ViroPharma had about $184 million in cash and equivalents and 18.7 million shares outstanding. The shares were sold under a previously filed shelf registration statement.
ViroPharma, of Exton, Pa., submitted a new drug application for Picovir on July 31. Gearing up for an expected approval, ViroPharma is planning to use part of the new funds for pre-marketing of Picovir, manufacturing costs to provide inventory for an anticipated initial product launch and hiring a sales force. The product works by inhibiting the function of the picornavirus capsid ¿ a shell that encapsulates the virus and is necessary for infectivity and transmission.
In an agreement forged in September with Aventis Pharmaceuticals, the U.S. division of Aventis Pharma AG, of Frankfurt, Germany, ViroPharma will be building a 200-person sales force initially to promote two undisclosed Aventis products. ViroPharma will co-promote certain Aventis prescription products to primary care physicians in the United States. If and when Picovir is approved, the sales force then will promote that drug and only one Aventis product. ViroPharma received $25 million up front in the deal and would get 45 percent of Picovir profits. (See BioWorld Today, Sept. 11, 2001.)
In addition to clinical trials of Picovir, the money also will be used to advance ViroPharm¿s hepatitis C and respiratory syncytial virus (RSV) programs. Earlier this week ViroPharma and Wyeth-Ayerst Laboratories, of Radnor, Pa., stopped development of a hepatitis C compound that failed to show the desired level of antiviral activity in Phase IIa trials. However, ViroPharm¿s vice president of discovery research said that the two companies are using the knowledge they have gained thus far and evaluating a number of additional compounds for hepatitis C. (See BioWorld Today, Nov. 13, 2001.)
ViroPharma also has completed Phase I trials of VP 14637, a small-molecule therapeutic for RSV. Phase II trials are expected to begin soon. The product has not been partnered.
Other uses for the money include capital expenditures, debt service, potential acquisitions and general working capital.