By Brady Huggett

ViroPharma Inc. said it has found the perfect way to develop a sales force ¿ not too early, not too late ¿ for its common cold antiviral product, Picovir, by forming a co-development, co-promotion agreement with Aventis Pharmaceuticals that will net ViroPharma at least $25 million.

ViroPharma will receive $25 million as an initial payment from Aventis, the U.S. division of Aventis Pharma AG, of Frankfurt, Germany, plus undisclosed milestones for regulatory and other achievements. The companies will split profits from Picovir, if approved, 55 percent to 45 percent, in Aventis¿ favor.

For ViroPharma and those watching the company, it was a significant development.

¿It¿s incredibly important for ViroPharma,¿ said Mark Augustine, an analyst for Minneapolis-based U.S. Bancorp Piper Jaffray. ¿Investors have been anticipating the signing of a major corporate partnership. [ViroPharma] wants to become a fully integrated biopharmaceutical company.¿

¿[Aventis is] an extremely good fit, not just for ViroPharma, but also for Picovir, for two reasons,¿ said Michel de Rosen, CEO and president of Exton, Pa.-based ViroPharma. ¿One, they met our selection criteria. Two, they proved to be the most passionate and the most convincing about the way to grow Picovir.¿

De Rosen would not disclose the amount of milestones, but said they were ¿absolutely fair¿ and reflected ¿the great potential of Picovir.¿

De Rosen explained ViroPharma¿s selection criteria as desiring a company that was big not only in the U.S. market, but also in the general practitioners market. It wanted to sign with a company that was talented at managed care, launching products and creating new markets. ViroPharma also desired to team up with a successful company, one that works well with partners, as well as a company that has a presence in the respiratory field. That¿s a substantial list, but Aventis, a company that grew its U.S. sales by 28 percent last year, de Rosen said, and has a respiratory product, Allegra, for seasonal allergic rhinitis in adults and children 6 years of age and older, hit all the targets.

¿No one met [the criteria] as well as they did,¿ de Rosen said.

The further benefit for ViroPharma, de Rosen said, has to do with the 200-person sales force that will be assembled in early 2002 to promote two undisclosed Aventis products. ViroPharma will co-promote certain Aventis Pharmaceutical prescription products to primary care physicians in the United States, and will receive detailing fees from Aventis for the calls. If and when Picovir is approved, the sales force will then promote that drug and only one Aventis product.

The sales force setup solves a problem.

¿When you are young, when should you have your first sales force?¿ said de Rosen. ¿If you do it when the product is already approved, it is too late and you have to scramble ¿ you have little time to educate them and train them. The other approach is to do it early. But when? If the product is delayed, then the sales force is delayed. This approach with Aventis is very unique and very good. We get the sales force without the risk of financial exposure.¿

ViroPharma submitted its new drug application for Picovir with the FDA on July 31. The product works by inhibiting the function of the picornavirus capsid ¿ a shell that encapsulates the virus and is necessary for infectivity and transmission. ViroPharma licensed the product in from Sanofi-Synthelabo, of Paris, for the United States and Canada. ViroPharma will pay a ¿high single-digit¿ royalty to Sanofi-Synthelabo before the profit split with Aventis, de Rosen said.

The signing crossed another item off ViroPharma¿s list, de Rosen said.

¿We had a very busy year,¿ de Rosen said. ¿We wanted to negotiate our agreement with Synthelabo, and we needed to reach statistical significance in our two pivotal trials, then we needed to submit, and then we needed to sign a deal with a top-notch player. And we needed new trials in [viral respiratory infection]. These five things have been achieved on time or even ahead of time.¿

Now it¿s time to look ahead, both for investors and the company.

¿[The deal] helps ViroPharma shape people¿s expectation for a fully integrated biopharmaceutical company,¿ Augustine said. ¿At this point, it is a commercial story, and you can see that light of a fully integrated biopharmaceutical company in the making.¿

¿We have two priorities,¿ de Rosen said. ¿The interaction with the [FDA] and the interaction with Aventis. We are not saying everything is done and it all will be easy. But that is why we picked Aventis ¿ they have the shared passion.

¿We believe that step after step, month after month, we are building the company.¿

ViroPharma¿s stock (NASDAQ:VPHM) fell $1.21 Monday to close at $28.94.

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