VIVUS Reports Narrower-than-Expected Loss on Qsymia Sales - Analyst Blog

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VIVUS Inc. 's ( VVUS ) second quarter 2014 loss (excluding one-time items) of 25 cents per share was much narrower than the Zacks Consensus Estimate of a loss of 31 cents and the year-ago loss of 52 cents.

The company's total revenues for the second quarter of 2014 came in at $21.9 million as compared to $5.5 million recorded in the year-ago period. The second quarter 2014 revenues included $4.2 million of license and milestone revenue, $5.7 million of supply revenue and $1.1 million of royalty revenue related to its erectile dysfunction (ED) drug, Stendra (EU trade name: Spedra). The Zacks Consensus Estimate stood at $16 million for the reported quarter.

Quarter in Details

The company's weight management drug Qsymia generated net product sales of $11 million as compared to $4.1 million recorded in the first quarter of 2014. Qsymia prescriptions (approximately 138,000) witnessed an approximately 2.4% sequential increase in the reported quarter. In the second quarter of 2014, 61% of total prescriptions were a free good or on a discount offer. At the second quarter conference call, the company stated that it is still looking for partnership opportunities for Qsymia.

Apart from Qsymia, the company's portfolio consists of another product Stendra. Auxilium Pharmaceuticals Inc. ( AUXL ) has launched the product in the U.S. in Dec 2013, while Menarini launched the drug in the EU in Apr 2014.

VIVUS has licensed Sanofi ( SNY ) for the development and commercializing of the drug in Africa, the Middle East, Turkey, and the Commonwealth of Independent States (CIS) including Russia.

In the second quarter of 2014, research and development expenses were $4.1 million, down 55.7% year over year. Selling, general and administrative expenses were down 28.5% to $28.3 million.

Our Take

VIVUS posted a narrower-than-expected loss and a revenue beat in the second quarter of 2014. We are also pleased with the Qsymia prescription growth.

However, the competitive nature of the obesity market, given the presence of Belviq and others, keeps us concerned. The successful commercialization of Qsymia is crucial for the financial performance of VIVUS. Additionally, we believe it is important for the company to find a suitable partner at this juncture to realize the full potential of Qsymia.

Meanwhile, Auxilium has submitted a supplemental New Drug Application (sNDA) for Stendra to include the 15-minute onset of action data in the 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.

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 #2 (Buy).

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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 Nasdaq, Inc.

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

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