) posted a loss of 14 cents per share in the fourth quarter 2011,
wider than the Zacks Consensus Estimate of a loss of 11 cents, but
narrower than the year-ago loss of 23 cents per share. In 2011, the
company recorded a loss of 56 cents per share, wider than the Zacks
Consensus Estimate of 52 cents, but narrower than the prior-year
loss of 93 cents per share. Lower research and development
(R&D) and general and administrative (G&A) expenses led to
the narrower loss at Vivus.
The company did not record any revenues during the quarter and,
similar to the prior-year periods.
During the quarter, R&D expenses decreased 12.2% year on
year to $5.3 million. Moreover, G&A expenses amounted to $6.5
million, reflecting a decline of 6.8% from the prior-year
Vivus experienced a lower R&D spend during the quarter, as
both Qnexa and avanafil have completed their clinical studies and
have been filed for regulatory approval. Further, G&A expense
went down primarily due to lower pre-commercialization expenses of
Recently, the US Food and Drug Administration's (FDA) advisory
committee recommended the approval of Qnexa for the treatment of
obesity, including weight loss and weight maintenance of obese
patients (BMI > 30 kg/m2), or overweight patients (BMI > 27
kg/m2), with weight-related co-morbidities such as hypertension,
type II diabetes, dyslipidemia, or central adiposity (abdominal
The committee voted 20-2 in favor of approval on the basis of a
favorable benefit-risk profile of the candidate.
We note that Vivus resubmitted the new drug application (NDA)
for Qnexa in October 2011. The resubmission followed the company's
agreement with the FDA's Endocrine and Metabolic Division in
September 2011. The FDA accepted the NDA in November last year and
set a target date of April 17, 2012, for the application.
Vivus also filed a Marketing Authorization Application (
) with the European Medicines Agency (EMA) for Qnexa in December
2010. The Committee for Medicinal Products for Human Use (
) issued a 180-Day letter of intent (LOI) requesting additional
information including risk minimization activities (the equivalent
of REMS in the US) to address various issues relating to
cardiovascular, neuropsychiatric and potential teratogenic effects
of Qnexa. Moreover, the letter requires Vivus to discuss the
benefit/risk profile of the different doses of Qnexa, the drug's
potential use in different patient populations, and the expected
long-term benefit of treatment with Qnexa. The company said that it
plans to respond to the letter in the second quarter of 2012.
Obesity treatments currently in the market include orlistat,
Roche Holdings Ltd.
) as Xenical and by
) as alli.
In September 2011, the FDA accepted for review the company's NDA
for its investigational drug, avanafil. The company is seeking to
get the drug approved for the treatment of erectile dysfunction (
). The regulatory body has set a target date of April 29, 2012, for
the application, which was submitted in late June 2011.
Additionally, Vivus plans to make a regulatory filing for
avanafil with the EMA in the first quarter of 2012.
Already approved ED treatments include
) Viagra and GlaxoSmithKline's Levitra.
Neutral on Vivus
We currently have a Neutral recommendation on Vivus. The stock
carries a Zacks #3 Rank (Hold rating) in the short-run. We believe
that 2012 will be a year of transformation for Vivus, with
potential approvals of both avanafil and Qnexa expected in
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