Usually, when a drug company's biggest-selling product gets new competition, that's bad news for the king of the hill.
But when the company is ViroPharma Inc., of Exton, and its antibiotic is Vancocin, such a development is more nuanced.
How else to explain why ViroPharma's shares closed at $19.35, up 49 cents or 2.6 percent, Tuesday after the Food and Drug Administration approved Optimer Pharmaceuticals Inc.'s Dificid on Friday?
Dificid will become the latest treatment for the sometimes-deadly hospital- acquired infection by a bacterium called Clostridium difficile, or C. diff., when it is launched by Optimer and its marketing partner, Cubist Pharmaceuticals Inc., in the third quarter of this year.
Optimer shares jumped $1.53, or 11.8 percent, to close Tuesday at $14.51.
The FDA approval of Dificid was a first for Optimer, of San Diego. But one reason some analysts don't expect ViroPharma to see an immediate hit to Vancocin sales is the cost of Dificid, which Optimer said would be $2,800 for a 10-day course of the medicine.
It can cost $1,000 to $1,800 to treat C. diff. with Vancocin.
Of ViroPharma's 2010 sales of $439 million, Vancocin accounted for $260 million. Though sales of the drug have been rising, that's largely been due to increases in the price. On ViroPharma's recent conference call with analysts, chief financial officer Charles A. Rowland said the company raised Vancocin's price by 9.4 percent in March.
In its 2010 annual report, ViroPharma said the number of prescriptions for Vancocin fell 5.8 percent between 2009 and 2010. Between 400,000 and 500,000 people in the United States are estimated to be affected by C. diff. infections annually.
A research note by Citadel Securities Institutional Research said Dificid's higher cost "will result in minimal effect" on Vancocin's market share because of "hospitals' high sensitivity to drug pricing."
The kind of competition that could whittle away Vancocin's sales would come from generic-drug makers, something that ViroPharma has been trying to stave off but that analysts view as inevitable. In its most recent annual report, ViroPharma warned that "there can be no assurance that future Vancocin sales will meet or exceed the historical rate of sales for the product."
Then again, ViroPharma may soon have a new top-selling drug in its portfolio. Sales of its Cinryze treatment for a rare genetic disorder, called hereditary angioedema, increased to $176.8 million in 2010 from $97.3 million in 2009.
Six student-run businesses will vie for seeding funds and space in a Drexel University business incubator at the finals of a competition Wednesday.
The LeBow College of Business' Laurence A. Baiada Center for Entrepreneurship holds its 2011 Entrepreneur Conference at World Cafe Live, 3025 Walnut St.
A panel of judges will pick the top three businesses, which will get the chance to develop their ideas in the Baiada incubator and have access to a variety of services provided by professional- services firms. The 2010 winner was Outplay Technologies L.L.C.