VIVUS (VVUS) Loss Narrower Than Expected, Revenues Up Y/Y

VIVUS Inc. (NASDAQ:VVUS) reported a loss of 1 cent per share in the first quarter of 2017, which was narrower than a loss of 12 cents in the year-ago period as well as the Zacks Consensus Estimate of a loss of 13 cents.

Shares of the biotech company rose almost 3% in aftermarket hours on Wednesday. However, so far this year, Vivus’ shares have underperformed the Zacks classified Medical - Biomedical and Genetics. The stock fell 10.4% during the period, while the industry witnessed a gain of 5.3%.

Quarterly revenues increased 76.3% to $27 million form the year-ago period. It included a one-time payment of $5 million for a license to certain clinical data related to phentermine, the active pharmaceutical ingredients (API) for Qsymia.

Quarter in Detail

The company’s weight management drug Qsymia generated net product sales of $17.6 million, up almost 42% from the year-ago period. The company recognized net product revenues of $7.3 million related to units of Qsymia shipped prior to Jan 1, 2017 due to a change in revenue recognition methodology by the company. Also, the company expects the new method to increase volatility of Qsymia sales.

Supply and royalty revenues from Stendra/Spedra were $4.4 million, up 50.8% from the year-ago period due to an increase in supply revenues as a number of orders placed by commercialization partners in this quarter were better than the year-ago period.

General and administrative expense was $6.2 million, down 20% year over year mainly attributable to cost control initiatives undertaken by the company. Research and development expense increased 120% to $2.2 million in the reported quarter due to payment of license fees to Selten Pharma for the development of tacrolimus and ascomycin for the treatment of pulmonary arterial hypertension (PAH).

In Jan 2017, Vivus acquired exclusive, worldwide rights for the development and commercialization of tacrolimus and ascomycin from Selten Pharma, Inc. for the treatment of PAH and related vascular diseases.

In Jan 2017, Vivus granted a license to Hetero to manufacture and commercialize an authorized generic version of Stendra no earlier than Oct 29, 2024. Hetero had previously filed an abbreviated new drug application (ANDA) to get approval to market a generic version of Stendra. Also, in March this year, the company announced an agreement with Sanofi (NYSE:SNY) to reacquire the commercial rights to Stendra in Africa, the Middle East, Turkey and the Commonwealth of Independent States, including Russia.

Zacks Rank & Key Picks

Vivus currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Grifols, S.A. (NASDAQ:GRFS) and Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) . While Infinity sports a Zacks Rank #1 (Strong Buy), Grifols carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Grifols’ earnings estimates increased 1.8% to $1.16 for 2017 and 2.4% to $1.28 for 2018 over the last 60 days. Its share price is up approximately 32.9% year to date.

Infinity’s loss estimates narrowed 27.9% to $1.03 for 2017 and 13.1% to $1.52 for 2018 over the last 60 days. Its share price is up 40.7% year to date.

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