) recently announced that it has entered into a license and
commercialization in addition to a supply agreement for its
erectile dysfunction (ED) drug, Spedra, with privately-held
Italian pharmaceutical company, Menarini. Investors reacted
positively to the news.
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As per the terms of the agreement, Menarini will get the rights
to Spedra in more than 40 European countries, apart from
Australia and New Zealand. In exchange VIVUS will get an upfront
payment of approximately $21 million and approximately $30
million in the first year. VIVUS will also be eligible to receive
milestone and other payments of approximately $102 million,
depending upon certain pre-specified criteria. Additionally, the
company will get royalties on net sales of Spedra from Menarini.
VIVUS and Menarini also entered into a supply agreement for
Spedra, according to which VIVUS will supply the product to the
The partnership on Spedra, a phosphodiesterase type 5 (PDE5)
inhibitor, will not only boost VIVUS' balance sheet but also go a
long way in removing uncertainties related to the drug's launch
in those territories.
We remind investors that the European Commission (EC) cleared
Spedra, for ED, in the EU in Jun 2013. The approval did not come
as a surprise as, in Apr 2013, the European Medicines Agency's
(EMA) Committee for Medicinal Products for Human Use (CHMP)
recommended the approval of the drug.
The approval came on the basis of promising data from three phase
III trials, REVIVE, REVIVE-Diabetes and REVIVE-RP, and a
year-long safety study.
We note that the US Food and Drug Administration (FDA) approved
the drug under the trade name Stendra for ED in April last year.
VIVUS is looking for a partner in the US to market the drug.
We note that a few days back VIVUS announced encouraging data
from a multi-center, placebo-controlled study (TA-501) evaluating
the efficacy of Stendra in men suffering from ED.
The study enrolled 440 patients with mild-to-severe ED with or
without diabetes. Data from the study revealed that on an average
Stendra was effective after 10 minutes and 12 minutes of taking
the 200 mg and 100 mg formulation of the drug, respectively.
According to the company, ED therapies recorded combined sales of
over $5.5 billion in 2012. The ED market is expected to grow
further in the coming years.
Currently approved PDE5 inhibitors including
) Viagra and
Eli Lilly and Company
) Cialis are recommended for ingestion one to two hours prior to
sexual activity or daily. We believe Stendra's fast action could
help the drug gain share once launched.
VIVUS currently carries a Zacks Rank #3 (Hold). Companies that
currently look attractive include
) with a Zacks Rank #1 (Strong Buy).