Stock Alert for VIVUS Inc. (VVUS)
  • Stock Alert for VIVUS Inc. (VVUS)
  • Stock Alert for VIVUS Inc. (NASDAQ: VVUS)
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    Market Alert for Vivus Inc. (VVUS)

    VIVUS Inc. (Nasdaq: VVUS) is a biopharmaceutical company developing innovative, next-generation therapies to address unmet needs in obesity, diabetes, obstructive sleep apnea and sexual health.  Its lead product in clinical development, Qnexa, completed phase III clinical trials for the treatment of obesity and a New Drug Application (NDA) was filed and accepted by the Food and Drug Association (FDA). The Company received a Complete Response Letter (CRL) from the FDA and is preparing a written response to address the FDA’s requests for information included in the CRL. Qnexa is also in phase II clinical trials for type 2 diabetes and obstructive sleep apnea.  VVUS is also developing an erectile dysfunction drug, Avanafil, which is in phase III clinical trials.

    VVUS was founded in 1991 and is headquartered in Mountain View, California.

    Share Statistics (29-Nov-10) FY

    2008

    FY

    2009

    %

    Chg

    Q3

    2009

    Q3

    2010

    %

    Chg

    Symbol VVUS Revenue, $Mn 102.23 50.04 -51.0% 0.00 0.00
    Current price $6.46 Gross marg. 33.8% 34.3% 1.5%
    52wk Range: $4.69-$13.68 Oper. margin -13.0% -109.3% 740.8%
    Avg Vol (3m): 3,413,270 Net margin -9.7% -108.5%
    Market Cap. 524.58M
    Shares Outstanding EPS, $ -0.16 -0.75 368.8% -0.30 -0.22 -26.7%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    Third-Quarter Results

    For the three months ended September 30, 2010, VVUS reported a net loss of $18 million, or $0.22 net loss per share, as compared to a net loss of $21.1 million, or $0.30 net loss per share, during the same period in 2009. The decrease in net loss in the second quarter of 2010 as compared to the second quarter of 2009 primarily results from the decrease in research and development spending due to the completion of the phase III clinical trials for Qnexa for the treatment of obesity, partially offset by increased general and administrative expenses, primarily due to Qnexa pre-commercialization activities in the third quarter of 2010.

    Nine Months Results

    For the nine months ended September 30, 2010, the Company reported a net loss of $59.6 million, or $0.74 net loss per share, as compared to a net loss of $41.1 million, or $0.59 net loss per share, during the same period in 2009. The increase in net loss in the nine months ended September 30, 2010, as compared to the nine months ended September 30, 2009, results from the completion of the recognition of the Evamist deferred revenue in 2009 and increased general and administrative expenses, primarily due to Qnexa pre-commercialization activities, partially offset by decreased research and development spending due to the completion of the pivotal phase III clinical trials for Qnexa for the treatment of obesity.

    Cash, Cash Equivalents and Available-for-Sale Securities

    VVUS had cash, cash equivalents and available-for-sale securities of $158.2 million at September 30, 2010, as compared to $206.8 million at December 31, 2009.  The decrease in cash, cash equivalents and available-for-sale securities of $48.6 million is primarily due to cash used in operations and other net cash uses offset by proceeds of $2.4 million from the exercise of common stock options and ESPP purchases.

    Source: VIVUS Inc.


    Financial Strength (Nov-29-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 8.24 2.34 2.24 0.68
    Current Ratio (MRQ) 8.33 2.93 2.83 1.01
    LT Debt to Equity (MRQ) 11.28 15.10 23.77 117.71
    Total Debt to Equity (MRQ) 11.28 17.74 28.43 170.95
    Interest Coverage (TTM) -19.57 0.18 1.28 19.18

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 15 polled investment analysts. Against the Vivus Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 3 4 4 2 2 0
    4 weeks ago 3 3 4 2 2 0
    2 months ago 3 1 6 2 2 0
    3 months ago 2 1 7 1 2 0
    Last year 3 3 4 0 0 0

    The 12 analysts offering 12-month price targets for VVUS have a median target of 11.00, with a high estimate of 16.00 and a low estimate of 2.00. The median estimate represents a 73.50% increase from the last price of 6.34.

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Dec-10 6 7.45 8.70 4.90 8.43
    Quarter Ending Mar-11 2 1.46 2.80 0.12
    Year Ending Dec-10 15 9.90 19.10 4.37 27.16
    Year Ending Dec-11 10 27.42 60.00 0.50 56.64
    EARNINGS (per share)
    Quarter Ending Dec-10 16 -0.21 -0.07 -0.26 -0.20
    Quarter Ending Mar-11 4 -0.21 -0.13 -0.28
    Year Ending Dec-10 17 -0.94 -0.66 -1.04 -0.78
    Year Ending Dec-11 14 -0.77 -0.36 -1.15 -0.50
    LT Growth Rate (%) 1 53.50 53.50 53.50

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=VVUS.OQ


    Investment Highlights

    VVUS late last month received a Complete Response Letter (CRL) from the FDA regarding the Qnexa NDA. The Company said the FDA declined to approve Qnexa and asked a detailed plan to evaluate and mitigate risks in women of childbearing potential.  The drug regulator also asked for evidence that the elevation in heart rate associated with phentermine/topiramate does not increase the risk for major adverse cardiovascular events. Qnexa suffered a setback three months prior when a panel of experts assembled by the FDA voted against the drug’s approval, citing side effects such as birth defects, depression and heart problems.

    “We remain confident in the efficacy and safety profile of Qnexa demonstrated in the clinical development program and look forward to continue working with the FDA towards the approval for the treatment of obesity,” said CEO Leland Wilson.

    The Company expects to complete its response to the FDA by the end of the year.

    About Qnexa

    Qnexa is an investigational drug being developed to address weight loss, type 2 diabetes and obstructive sleep apnea. Qnexa is a once-a-day, proprietary, oral, controlled-release formulation of low-dose phentermine and topiramate, which together decrease appetite and increase satiety (the sense of feeling full), the two main mechanisms that impact eating behavior. In phase II and III clinical data to date, patients taking Qnexa have demonstrated statistically significant weight loss, glycemic control, and improvement in cardiovascular risk factors, when used in combination with a diet and lifestyle modification program.

    During the third quarter, VVUS announced top-line results from a two-year study of Qnexa that showed significant and sustained weight loss of greater than 10% over two years. The Company reported that patients taking top- and mid-dose Qnexa achieved and maintained weight loss over two years of 11.4% and 10.4% of their initial body weight, respectively, as compared to placebo-treated patients with 2.5% weight loss (ITT-LOCF, p<0.0001). The findings come from the SEQUEL study (OB-305), a 52-week extension study for a subset of patients who completed the previously reported 56-week CONQUER study. The total study period was 108 weeks. SEQUEL included 675 obese or overweight patients, all of whom had two or more weight related co-morbidities, and an average baseline BMI of 36.1. Consistent with the first year experience, Qnexa therapy was well tolerated, with no new or unexpected adverse events. The most common side effects seen were constipation, tingling, dry mouth, altered taste and insomnia.

    Source: reuters.com; http://www.vivus.com

    Technical Analysis

    Source: http://stockcharts.com

    VVUS is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

    VVUS is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    The MACD for VVUS currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Nov29-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Amylin Pharmaceuticals Inc. AMLN 12.98 1.87B n/a n/a 2.88 3.33
    Arena Pharmaceuticals Inc. ARNA 1.48 179.69M n/a n/a 10.55 8.43
    GlaxoSmithKline plc GSK 38.72 98.46B 13.04 10.06 2.16 2.18
    Eli Lilly & Co. LLY 33.89 37.45B 7.20 7.68 1.63 1.67
    Pfizer Inc. PFE 16.61 133.09B 7.48 7.25 1.98 2.01
    Orexigen Therapeutics Inc. OREX 5.56 264.56M n/a n/a n/a 6.61
    Abbott Laboratories ABT 46.60 72.03B 11.18 10.00 2.05 1.89
    Biotechnology Median 19.08 n/a 6.97 n/a
    VIVUS Inc. VVUS 6.46 524.56M n/a n/a 59.81 27.52

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases n/a 0
    Sales 84,250 3
    Net Shares Purchased (Sold) (84,250) 3
    Total Insider Shares Held 3.81M n/a
    % Net Shares Purchased (Sold) (2.2%) n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (14,466,300)
    % Change in Institutional Shares Held (49.64%)

    Source: Yahoo Finance

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