Why ViroPharma Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company ViroPharma (Nasdaq: VPHM  ) soared as much as 16% today after the company received supplemental approval to Cinryze's Biologics License Applications from the Food and Drug Administration for industrial scale manufacturing changes.

So what: The ruling today is important because it allows ViroPharma to adequately ramp up Cinryze production, with the relabeling process of previously produced vials only expected to take six weeks.

Now what: Today's FDA ruling is also important because ViroPharma has been in a world of hurt since the FDA ruled against it in allowing generic competition to enter the market to compete against its previous blockbuster, Vancocin. Since that ruling, both Akorn (Nasdaq: AKRX  ) and Watson Pharmaceuticals (NYSE: WPI  ) have entered the market with generic versions of the drug. Therefore, Cinryze is ViroPharma's new horse in the race, and today's actions allow it to greatly increase production and potentially profits. I'm still not sold on ViroPharma given the huge windfall it took with Vancocin's loss, but this is definitely a step in the right direction.

Craving more input? Start by adding ViroPharma to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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