Piper Jaffray downgraded ViroPharma (VPHM
) to market perform from outperform, after the company said Friday that the Food and Drug Administration may have taken a new stance on bioequivalence testing for the drug Vancocin.
Analyst Thomas Wei points out that the Office of Generic Drugs may allow requests for waivers for testing of bioequivalency through dissolution assays. ViroPharma has requested that the FDA reexamine the issue. Wei notes the possibility of sooner-than-expected Vancocin generic entrants and the risk to cash flows from Vancocin sales beyond 2008. He cuts his $24 target to $13.