VIVUS Inc. VVUS reported a loss of 19 cents per share in the second quarter of 2015, narrower than the Zacks Consensus Estimate of a loss of 23 cents and the year-ago loss of 25 cents.
The company’s total revenues for the second quarter of 2015 were $23 million, up 5% from the year-ago period and surpassing the Zacks Consensus Estimate of $20 million.
Quarter in Details
Second quarter revenues included royalty revenue of $0.9 million and $8.1 million of supply revenue.
The company’s weight management drug Qsymia generated net product sales of $14 million, up 11.1% sequentially. Qsymia prescriptions (approximately 152,000) grew 11.8% on a sequential basis. In the reported quarter, 64% of total prescriptions were a free good or on a discount offer.
The company reported that it is working with leading cardiovascular outcome trial experts to change the original design and execution of the AQCLAIM study (the FDA-required Qsymia cardiovascular outcomes trial (CVOT)). The goal is to reduce costs while fulfilling the requirement of demonstrating the long-term cardiovascular safety of Qsymia. The company is in discussions with the FDA regarding the same.
Apart from Qsymia, the company’s portfolio consists of Stendra. VIVUS has partnerships in place for the drug with companies like Sanofi SNY and is currently in partnership discussions for Latin America and certain Asian countries.
In the reported quarter, research and development expenses were $2.6 million, down 36.4% year over year. Selling, general and administrative expenses were down 21.5% to $22.2 million.
Restructuring Initiative
Along with reporting second quarter results, VIVUS announced a corporate restructuring plan which will see the company reducing headcount and cutting costs with the goal of achieving neutral or positive operating cash flows by the end of 2016. The company intends to cut its Qsymia sales force to 50 territories. VIVUS said that the branded obesity market in the U.S. has grown well below expectations reflecting factors like physician caution and reluctance to prescribe, experiences with prescribing other agents, reimbursement issues and lack of widespread consumer awareness.
Our Take
VIVUS’ second quarter results were better-than-expected with the company reporting a narrower-than-expected loss as well as higher-than-expected revenues. However, the company is facing challenges in the obesity market which may make it difficult to drive Qsymia sales. Qsymia is also facing a patent challenge.
VIVUS is a Zacks Rank #3 (Hold) stock. Ligand Pharmaceuticals Incorporated LGND and AMAG Pharmaceuticals, Inc. AMAG are better-ranked stocks in the health care sector – both hold a Zacks Rank #1 (Strong Buy).
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