VioPharma Runs Into FDA & FTC Troubles Over Staph Drug (VPHM)

ViroPharma Incorporated (NASDAQ: VPHM) is getting crushed on news that the Food & Drug Administration has denied the petition filed by ViroPharma on March 17, 2006 related to the FDA’s proposed in vitro method for determining bioequivalence of abbreviated new drug applications referencing Vancocin® Capsules.  In the FDA response, the agency denied the petition and also informed the company that a final guidance for vancomycin bioequivalence consistent with the FDA’s citizen petition response is forthcoming. But wait, there’s more…

In addition, ViroPharma has received a notification that the Federal Trade Commission is conducting an investigation into whether the company has engaged in unfair methods of competition with respect to Vancocin.

Vancocin is indicated for the treatment of C. difficile-associated diarrhea and is also used for the treatment of enterocolitis caused by Staphylococcus aureus (including MRSA).  Vancocin is contraindicated in patients who have experienced a hypersensitivity to vancomycin.

ViroPharma also noted that the FDA informed the company that the recent supplemental new drug application  for Vancocin which was approved back on December 14, 2011 would not qualify for three additional years of exclusivity.  The ruling was based on the agency’s assertion that in order for an sNDA for an old antibiotic such as Vancocin to be eligible for a grant of exclusivity, it must be a significant new use or indication.  Furthermore, the FDA indicated that it is approving three abbreviated new drug applications for generic versions of vancomycin capsules.

The company is going to try to fight it out and noted that it intends to file a complaint in the United States District Court for the District of Columbia.  In the complaint the company will seek an injunction to set aside the FDA’s approval of ANDA’s for generic versions of Vancocin.  The courts had previously dismissed ViroPharma’s lawsuit on the procedural basis of standing, but ViroPharma is claiming that the substance of the company’s bioequivalence arguments and the arguments regarding Vancocin’s eligibility for exclusivity have not been litigated before the Court.

Investors are shooting first and asking questions later.  Shares closed at $28.61 against a 52-week range of $14.62 to $33.17, but shares are down over 19% around $23.00 in active pre-market trading.

JON C. OGG