ViroPharma Incorporated announced that it has restructured its organization to focus its resources on the advancement and commercialization of later stage products, with the ultimate objective of accelerating the company's path toward becoming a profitable pharmaceutical company.

As part of the restructuring, ViroPharma has substantially discontinued its early stage activities, including discovery research and most internal preclinical development activities. ViroPharma also made reductions in clinical development and general and administrative personnel. The company will complete certain discrete efforts related to its early stage programmes in order to finalize the transition. Upon completion of these activities in mid-2004, ViroPharma will have reduced its workforce by approximately 70 per cent overall. As a result of its restructuring, the company expects to have sufficient cash available at the beginning of 2004 to fund its current business operations and debt service requirements until at least the end of 2006. The company estimates that approximately $9 million of costs related to this restructuring will be included in ViroPharma's first quarter 2004 operating results.

"We need to transform ViroPharma's business so that we are better positioned to reach our goal of generating revenues, and then achieving profitability, sooner. We intend to build franchises within narrowly focused prescribing groups," said Michel de Rosen, ViroPharma's chairman and chief executive officer. "Initially we will focus on the transplant, hepatology and gastroenterology areas, using our clinical programmes in cytomegalovirus (CMV) infections related to hematopoietic stem cell (bone marrow) transplantation, and hepatitis C, as foundations for that effort."

"Building on the company's recent focus on business development, which resulted in the in-licensing of maribavir from GlaxoSmithKline in August 2003 and the intranasal pleconaril option agreement with Schering Plough in November 2003, we intend to aggressively pursue products in late stage clinical development, and marketed products that are not currently promoted, to expand our current portfolio," de Rosen stated. "The reduction in expenses anticipated by this restructuring should provide ViroPharma the flexibility to execute the planned development of our pipeline of antiviral programs, and consider new opportunities to expand our product portfolio."

"This decision is extremely painful, yet necessary for us to accomplish our objective of transforming the company and accelerating our path toward becoming a profitable pharmaceutical company. In focusing our resources to achieve this objective, unfortunately we will no longer have roles for many of the outstanding individuals who have contributed significantly to this company. I wish to extend my heartfelt thanks to all my colleagues with whom I have had the pleasure of working. All of our colleagues affected by this restructuring will be sorely missed."

ViroPharma's discontinuation of its early stage activities requires the company to wind down its biodefense program in the coming months as part of the transition. ViroPharma also has ceased efforts to develop pleconaril for the treatment of serious or life-threatening diseases as part of its restructuring. The company will continue to conduct initial studies of an intranasal formulation of pleconaril for the treatment of the common cold under its option agreement with Schering-Plough. ViroPharma also will continue its HCV development efforts in its collaboration with Wyeth.