Narrower-than-Expected Loss at VIVUS - Analyst Blog

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VIVUS Inc. 's ( VVUS ) fourth quarter 2013 loss (excluding one-time items) of 9 cents per share was much narrower than the Zacks Consensus Estimate of a loss of 43 cents and the year-ago loss of 56 cents.

The company's total revenue for the fourth quarter of 2013 came in at $44.1 million as compared to $2.0 million recorded in the year-ago period. The fourth quarter 2013 revenues included $34.8 million of license fee received from Auxilium Pharmaceuticals Inc. ( AUXL ) and Sanofi ( SNY ) for the erectile dysfunction (ED) drug, Stendra (EU trade name: Spedra). The Zacks Consensus Estimate stood at $25 million for the fourth quarter of 2013.

VIVUS' 2013 loss (excluding one-time items but including stock-based compensation) of $1.54 per share was also narrower than the Zacks Consensus Estimate of $1.95. The year-ago loss was $1.42 per share. The company's total revenue for 2013 came in at $81.1 million as compared to $2.0 million recorded in the year-ago period. The Zacks Consensus Estimate stood at $60 million for 2013.

Qsymia Performance

We remind investors that Qsymia was launched in the U.S. in Sep 2012. The U.S. Food and Drug Administration (FDA) cleared Qsymia in Jul 2012 as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese (Body Mass Index, or BMI - 30 or more) or overweight (BMI - 27 or more) adults suffering from at least one weight-related co-morbid condition.

Net product sales of Qsymia in the reported quarter were $7.7 million, up 20.3% sequentially. Qsymia prescriptions (approximately 124,000) witnessed a 14% sequential jump in the reported quarter. Prescription volume was negatively impacted by the holiday season (in Nov and Dec).

At the fourth quarter conference call, the company stated that Qsymia was available at over 37,000 certified retail pharmacies in the U.S., reflecting an increase of 6,000 sequentially. The company further stated that reimbursement trends for the drug are improving.

Stendra

Apart from Qsymia, the company's portfolio consists of another approved product, Spedra, which received approval in the U.S. in Apr 2012 and in the EU in Jun 2013. In the reported quarter, the drug generated revenues of approximately $1.5 million.

VIVUS is collaborating with several companies for the commercialization of Stendra. It has inked a licensing and commercialization deal with Sanofi for Stendra. As per the terms of the deal, Sanofi will undertake the responsibility of obtaining regulatory approval and commercializing the drug in Africa, the Middle East, Turkey, and the Commonwealth of Independent States (CIS) including Russia. VIVUS has also entered into a license and commercialization agreement with Menarini (40 European countries and Australia and New Zealand) and Auxilium (the U.S. and Canada).

While Auxilium launched the drug in the U.S. last December, Menarini is expected to launch the drug in the EU in the first half of 2014. Meanwhile, Auxilium has submitted a supplemental New Drug Application (sNDA) for Stendra. The company is looking to incorporate data from a study (in which Stendra was found to be effective within 15 minutes of ingestion) in its label. The FDA is expected to render a decision by Sep 20, 2014. We believe Stendra's fast action could help the drug gain share.

In the fourth quarter of 2013, research and development expenses were $5.0 million, down 35.6% year over year. Selling, general and administrative expenses were down 27.3% to $36.6 million benefiting from the company's restructuring efforts.

Our Take

We are concerned about the competitive nature of the obesity market given the presence of Belviq among others, keeps us concerned. The successful commercialization of Qsymia is crucial for the financial performance of VIVUS as it can drive the company to profitability.

VIVUS, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Some better-ranked biopharma stocks, worth considering, include Alexion Pharmaceuticals, Inc. ( ALXN ) with a Zacks Rank #1 (Strong Buy).



ALEXION PHARMA (ALXN): Free Stock Analysis Report

AUXILIUM PHARMA (AUXL): Free Stock Analysis Report

SANOFI-AVENTIS (SNY): Free Stock Analysis Report

VIVUS INC (VVUS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ED , CIS , ALXN , AUXL , SNY

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