Viropharma Inc. has a market cap of $1.08 billion; its shares were traded at around $13.9 with a P/E ratio of 16.2 and P/S ratio of 3.5. VPHM is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations: 2009 ($65.1 million) for which no impairment occurred in the first quarter of 2010, increased net sales of Vancocin and Cinryze ($30.4 million), and a decrease in our research and development expense due to the wind-down of our CMV program ($10.1 million), partially offset by increased cost of sales ($10.0 million).
Cost of sales increased over the prior year by $10.0 million due to the increase in Cinryze units sold. Additionally, we expensed $1.5 million in the first quarter of 2010 related to non-refundable start up costs paid to our new plasma supplier. Vancocin and Cinryze cost of sales includes the cost of materials and distribution costs and excludes amortization of product rights. As part of our October 2008 purchase of Lev, we acquired Cinryze inventory which was recorded at fair value in purchase accounting. This step-up of inventory value increased the cost of sales during the three months ended March 31, 2009 by $1.1 million. We have utilized all inventory that was recorded at fair value as part of the Lev purchase in 2009.
Selling, general and administrative expenses (SG&A) decreased $3.3 million for the three months ended March 31, 2010 as compared to 2009. This decrease was driven by a decrease in compensation expense ($1.6 million) and decreased medical education activities ($2.0 million). Included in SG&A are legal and consulting costs incurred related to our opposition to the attempt by the OGD regarding the conditions that must be met in order for a generic drug application to request a waiver of in-vivo bioequivalence testing for copies of Vancocin, which were $1.2 million and $1.3 million for the three-months of 2010 and 2009, respectively. We anticipate that these additional legal and consulting costs will gradually diminish in future periods. We anticipate continued increased spending in selling, general and administrative expenses in future periods as we continue the commercial launch of Cinryze.
Intangible amortization for the three months ended March 31, 2010 and 2009 was $7.6 million and $7.3 million, respectively.
Interest income for three months ended March 31, 2010 and 2009 was $31,000 and $144,000, respectively.
During the quarter ended March 31, 2010, we generated $38.3 million of net cash from operating activities, primarily from our net income plus non-cash items and the change in accounts payable. We used $17.7 million of cash from investing activities to purchase our short-term investments and our net cash provided by financing activities for the quarter ended March 31, 2010 was $2.3 million and relates to stock option exercises. For the prior year period ended March 31, 2009, we used $9.2 million of net cash from operating activities, primarily from the increase in accounts receivable and inventory. We used $0.8 million of cash from investing activities and our net cash used in financing activities for the quarter ended March 31, 2009 was $20.9 million, mainly in the repurchase of a portion of our senior convertible notes.
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