VIVUS Inc. (NASDAQ: VVUS)

VIVUS Inc. (VVUS) is a pharmaceutical company focused on the development and commercialization of therapeutic products. The Company’s product pipeline includes three late-stage clinical products, each addressing specific components of the obesity, diabetes and sexual health markets. One of these investigational products, Qnexa, is in phase III clinical trials for obesity and in phase II clinical trials for diabetes. The Company’s late-stage investigational product pipeline includes Qnexa for treating obesity, for which the two of the phase III studies are in process and one phase III study has been completed; Qnexa for treating diabetes, for which a one-year phase II study has been completed; Avanafil, is being developed for the treatment of erectile dysfunction; for which phase III studies are in process, and Luramist (Testosterone MDTS), which is being developed to treat hypoactive sexual desire disorder in women, for which a phase II study has been completed.

The Company was founded in 1991 and is headquartered in Mountain View, California.

Source: Reuters.com, SEC Filings.

Financial Summary

Product revenues from the sale of MUSE in the third quarter of 2009 were $4.3 million, as compared to $4.4 million in the third quarter of 2008. License and other revenue was $115,000 and $21 million in the third quarters of 2009 and 2008, respectively. The third quarter 2008 included the recognition of deferred license revenue from Evamist. Recognition of the deferred revenue from the sale of Evamist ended in May 2009. Total revenue for the third quarter of 2009 was $4.4 million, as compared to $25.5 million for the third quarter of 2008.

Operating expenses for the third quarter of 2009 were $24.8 million as compared to $22.6 million for the same period in 2008. The difference in operating expenses for the third quarter was primarily attributable to spending related to our phase III clinical trials of Avanafil, our orally administered investigational drug candidate for the treatment of erectile dysfunction, partially offset by reduced spending on the obesity trials for Qnexa which were completed in the third quarter of 2009.

Net loss for the third quarter of 2009 was $21.1 million, or $0.30 per share, as compared to net income of $266,000, or $0.00 per share, for the third quarter of 2008.

Product revenues from the sale of MUSE for the first nine months of 2009 were $9.7 million, as compared to $10.3 million for the same period of 2008. License and other revenue was $31.7 million for the first nine months as compared to $63.1 million for 2008. The first nine months of 2008 included recognition of deferred license revenue from Evamist. Recognition of the deferred revenue from the sale of Evamist ended in May 2009. Total revenue for the first nine months of 2009 was $41.4 million, as compared to $73.4 million for 2008.

Operating expenses for the first nine months of 2009 were $80.6 million as compared to $75.7 million for the same period in 2008. The difference in operating expenses for 2009 was primarily attributable to spending related to our phase III clinical trials of Avanafil, partially offset by reduced spending on the Qnexa program for obesity.

Net loss for the first nine months of 2009 was $41.1 million, or $0.59 per share, as compared to $3.2 million, or $0.05 per share, for 2008.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 10 polled investment analysts. Against the VIVUS Inc. company.

The 7 analysts offering 12-month price targets for VVUS have a median target of 13.00, with a high estimate of 18.00 and a low estimate of 9.00. The median estimate represents a 27.33% increase from the last price of 10.21.

Source: www.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=VVUS.W

Investment Highlights

VVUS yesterday announced new data from an analysis of the recently completed phase III study (REVIVE TA-301) of Avanafil, an investigational drug candidate for the treatment of erectile dysfunction (ED). Patients who attempted intercourse within 15 minutes of dosing were successful 67%, 69% and 72% of the time on 50, 100 and 200 mg of Avanafil, respectively, as compared to 29% of the patients on placebo (p<0.05). The previously-disclosed top-line results of the REVIVE study evaluating the safety and efficacy of Avanafil in 646 patients showed that all three doses of Avanafil met the FDA-defined primary study endpoints by demonstrating statistically significant improvement in erectile function as measured by the Sexual Encounter Profile (SEP) and improvements in the International Index of Erectile Function (IIEF) score.

Previously reported highlights of the studies include:

• Nearly 80% of all sexual attempts among patients on the 200 mg dose of Avanafil had erections sufficient for intercourse (SEP2).
• Full efficacy, as measured by successful intercourse, was maintained for all doses across multiple time points beyond six hours.
• All FDA-defined primary endpoints were met across all three doses of Avanafil.
• Avanafil was well tolerated.
• There were no drug-related serious adverse events in the study.
• Avanafil patients reported low rates of common PDE5i side effects, including headache, flushing and nasal congestion.

On January 7, VVUS announced positive results from a phase II study evaluating the safety and efficacy of Qnexa(R), an investigational drug, for the treatment of obstructive sleep apnea (OSA). VVUS recently completed phase 3 development of Qnexa for the treatment of obesity and submitted a New Drug Application (NDA) to the FDA for that indication. The study announced today demonstrated statistically significant improvement in the apnea/hypopnea index (”AHI” – a measure of the severity of sleep apnea) in patients with OSA treated with Qnexa for 28 weeks. Qnexa-treated patients also experienced significant weight loss, improvements in blood pressure, and overnight blood oxygen levels. OSA is a sleep-related breathing disorder that involves a decrease or complete halt in airflow despite an ongoing effort to breathe. OSA is associated with an increased risk of hypertension, diabetes, stroke, sudden cardiac death and all-cause mortality. Approximately 18 million Americans have sleep apnea. Currently, there are no approved pharmacologic treatments for OSA.

The apnea/hypopnea index is the standard measure of OSA severity, indicating the number of apnea/hypopnea events per hour of sleep. The phase II study (OB-204) was a single-center, randomized, double-blind, placebo-controlled parallel group trial including 45 obese men and women (BMI 30 to 40 kg/m2, inclusive), 30 to 65 years of age. Patients enrolled were diagnosed with OSA based on an AHI greater than or equal to 15 (moderate to severe) at baseline. In addition to receiving active or placebo drug, all patients were provided with an intensive lifestyle modification program.

Highlights of the study include:

• Patients treated with Qnexa for 28 weeks had a 69% reduction in sleep apnea events.
  • Qnexa treatment reduced the number of apnea/hypopnea events from a mean of 46 events per hour of sleep to 14 — compared to placebo patients with a reduction from a mean 44 events per hour of sleep to 27 (ITT-LOCF p less than or equal to 0.001 active vs. placebo).
  • Qnexa treated patients lost 10.2% body weight, or 23.8 lbs in 28 weeks — compared to 4.3% for placebo patients, or 10.4 lbs, (ITT-LOCF p<0.001 active vs. placebo).
  • Systolic blood pressure was reduced by 15 mm Hg in the Qnexa group from a mean of 138 mm Hg at baseline (ITT-LOCF p<0.04 active vs. placebo).
  • Mean overnight oxygen saturation was significantly improved in Qnexa patients (p<0.014 active vs. placebo).
  • Qnexa treatment was well tolerated with no serious adverse events reported in the Qnexa arm; the most common side effects were dry mouth, altered taste and sinus infection.

Sleep apnea is one of the leading co-morbidities associated with obesity and research has shown that weight loss can improve OSA. Qnexa may improve OSA through other mechanisms in addition to weight loss. Additional studies are planned to define those mechanisms.

Source: http://www.vivus.com/home

Technical Analysis

Source: http://stockcharts.com

VVUS is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

VVUS is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for VVUS currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

Report Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.