) second quarter 2012 loss of 24 cents per share was wider than the
Zacks Consensus loss Estimate of 23 cents and the year-ago loss of
20 cents per share. Higher general and administrative (G&A)
expenses for pre-commercialization activities of obesity drug
Qsymia led to the wider loss.
The company did not record any revenues during the quarter,
similar to the prior-year period.
During the quarter, research and development (R&D) expenses
decreased 19.6% year over year to $8.9 million. The decrease was
attributable to lower R&D spends during the quarter as both
Qsymia and erectile dysfunction (ED) drug Stendra (avanafil) have
completed their clinical studies.
However, G&A expenses shot up 191.2% year over year to $15.4
million. The huge rise in G&A expenses was due to higher
pre-commercialization expenses of Qsymia.
FDA Approval for Qsymia and Stendra
We note that 2012 has been a highly successful year for Vivus so
far with the US Food and Drug Administration (FDA) clearing two
drugs of the company.
In April 2012, the FDA approved Vivus' new drug application
(NDA) for its ED drug, avanafil, submitted in late June 2011. The
candidate is currently under review in Europe and Vivus expects a
decision in the first half of 2013. Vivus is currently looking for
potential partners for the worldwide commercialization of
Already approved ED treatments include
) Viagra and
In July 2012, the FDA also approved Qsymia formerly known as
Qnexa, for the treatment of obesity. The FDA cleared Qsymia as an
adjunct to a healthy diet (low on calories) and increased physical
activity for chronic weight management in obese patients (BMI >
30 kg/m2), or overweight patients (BMI > 27 kg/m2), with
weight-related co-morbidities such as hypertension, type II
diabetes mellitus, or dyslipidemia.
Approval was granted with a Risk Evaluation and Mitigation
Strategy (REMS) and post-marketing requirements. The REMS will keep
doctors and pregnant women informed about the risks associated with
Qsymia to the unborn baby.
Vivus expects launch of Qsymia in the US in the fourth quarter
of 2012 and has also issued patent protection for Qsymia till June
2020. We note that Qsymia is currently under review in the EU and
the European Medicines Agency (EMA) has scheduled for oral hearings
from the Committee for Medicinal Products for Human Use (CHMP) in
We however note that Vivus did not taste success in its first
attempt to gain FDA approval for Qsymia. In February 2012, an
advisory panel of the FDA voted 20-2 in favor of approving Qsymia
on the basis of a favorable risk-benefit profile of the drug. The
action date was pushed back by three months following Vivus'
submission of the REMS for Qsymia in the first week of April. The
REMS was a major amendment to the NDA and the FDA approved the drug
on the new action date of July 17.
Obesity treatments currently in the market include orlistat,
Roche Holdings Ltd.
) as Xenical and by Glaxo as alli.
Neutral on Vivus
We currently have a Neutral recommendation on Vivus. The stock
carries a Zacks #3 Rank (Hold rating) in the short run.
GLAXOSMITHKLINE (GSK): Free Stock Analysis
PFIZER INC (PFE): Free Stock Analysis Report
(RHHBY): ETF Research Reports
VIVUS INC (VVUS): Free Stock Analysis Report
To read this article on Zacks.com click here.