UPDATE 2-ViroPharma shares slide on production capacity doubts

* Investors worried about manufacturing capacity - analysts

* Q3 shr $0.24 vs est $0.26

* Co says to ramp up capacity in 2 phases

* Shares down as much as 18 pct (Recasts, adds conference call details; analyst comment, share movement)

By Vidya L Nathan

BANGALORE, Oct 28 (Reuters) - ViroPharma Inc (VPHM.O) shares fell as much as 18 percent on weak quarterly results and investor concerns over whether the company would be able to ramp up production of Cinryze, its treatment for a rare genetic disease, to meet rising demand.

"People do feel some level of concern when there is a manufacturing constraint. It might be a little more complicated than what the management makes it out to be," ThinkEquity analyst Brian Skorney said.

Ten months after the launch of Cinryze, new patients would have to wait longer than the average 90 to 120 days to get the drug, until additional production pitches in, the company said on a call with analysts.

The company recorded a 14 percent rise in third-quarter sales of Cinryze, its drug to prevent attacks of hereditary angioedema, to $29.1 million.

"The increase in the Cinryze uptake quarter-over-quarter is very well. With this capacity issue, for the next two quarters, the sales momentum probably has to be tempered a little bit," Maxim Group analyst Yale Jen said.

The company said an additional 40,000 to 45,000 doses will be available in the second quarter of 2010 and an industrial expansion of manufacturing capacity will start contributing to production efforts by the end of next year.

ViroPharma believes the step-up efforts will be enough to meet future demand of as much as twice or thrice of peak sales.

"Until we have clarity on these points (manufacturing shortfall) there is some risk to the story there, which was not there before," ThinkEquity's Skorney said.

QUARTERLY RESULTS MISS

ViroPharma's quarterly results slipped below analyst estimates, hurt by lower sales of its antibiotic Vancocin and higher income tax expense, but raised the lower end of its full-year sales view for its "growth engine" Cinryze.

ViroPharma tightened its annual Cinryze sales view to between $90 million and $95 million from an earlier sales forecast of $80 million to $95 million.

Third-quarter net income was $20.1 million, or 24 cents a share, compared with a net income of $27.1 million or 33 cents a share a year ago. ViroPharma recorded a net income of $31.9 million, on an adjusted basis.

Revenue rose 22 percent to $80.6 million, while Vancocin sales fell 22 percent to $51.4 million.

According to Thomson Reuters I/B/E/S, analysts were expecting a profit of 26 cents a share, before special items, on revenue of $84.2 million.

Shares of the company were down 13 percent at $8.00 Wednesday afternoon on Nasdaq. They had touched a low of $7.54 earlier in the day. (Reporting by Vidya L Nathan in Bangalore; Editing by Aradhana Aravindan)