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VIVUS Reports 2010 Fourth Quarter and Full-Year Financial Results

MOUNTAIN VIEW, Calif., Feb. 28, 2011 /PRNewswire/ -- VIVUS, Inc. (Nasdaq: VVUS), a biopharmaceutical company dedicated to the development and commercialization of novel therapeutic products, today reported its highlights and financial results for the fourth quarter and year ended December 31, 2010.

2010 Highlights






QNEXA Regulatory Update  

On October 28, 2010, we received a Complete Response Letter, or CRL, from the FDA regarding the QNEXA NDA.  The FDA issued the CRL to communicate its decision that the NDA could not be approved in its present form.  The CRL included the following areas: clinical, labeling, REMS, safety update, and drug scheduling.  We held a meeting with the FDA on January 19, 2011, to discuss the items contained in the CRL.  At this meeting the FDA requested that we assess the feasibility of performing a retrospective observational study utilizing existing healthcare databases to review fetal outcomes in the offspring of women who received 100mg of topiramate for migraine prophylaxis during pregnancy. In the QNEXA studies, which included 15 births from women exposed to topiramate, there were no reports of any adverse fetal outcomes.

We expect to reach agreement with the FDA, and if deemed feasible, initiate the retrospective observational study on fetal outcomes within the next two months.  We will provide more details as soon as an agreement is reached.  It is our goal to resubmit the NDA for QNEXA by the end of 2011.

Although no other requests for additional information or studies were made by the FDA at the meeting, there can be no assurances that the FDA will not request or require us to provide additional information or undertake additional studies in connection with the QNEXA NDA.  

"In 2010, we also made significant progress with the development of QNEXA as a treatment for obesity by filing for approval in the European Union, and for avanafil we completed the pivotal phase 3 studies," stated Leland Wilson, chief executive officer of VIVUS. "We are working diligently on responding to the FDA's request to assess the feasibility of conducting a retrospective observational study. Our goals for 2011 include the continued advancement towards approval of QNEXA in the US and the EU and filing the NDA for avanafil."

Fourth Quarter Results

In November 2010, we sold MUSE and the related assets.  Accordingly, all historical financial results related to the MUSE business have been classified as discontinued operations.  In the fourth quarter of 2010, we reported a net loss from continuing operations of $19.1 million, or $0.23 per share, net income from discontinued operations of $12.6 million, or $0.15 per share, and total net loss of $6.5 million, or $0.08 per share.  The loss from continuing operations included a $6.0 million loss on the early extinguishment of long term debt repaid in conjunction with the MUSE sale. The net income from discontinued operations in the fourth quarter included a $13.7 million gain from the sale of MUSE.

In the fourth quarter of 2009, we had a net loss from continuing operations of $15.5 million, or $0.19 per share, net income from discontinued operations of $2.3 million, or $0.03 per share, and total net loss of $13.2 million, or $0.16 per share.  In the fourth quarter of 2009, research and development expenses included the expenses related to the preparation of the QNEXA NDA, which was filed in December 2009.

Year End Results

For the year ended December 31, 2010, we reported a net loss from continuing operations of $75.4 million, or $0.93 per share, net income from discontinued operations was $9.4 million, or $0.11 per share, and total net loss of $66.1 million, or $0.82 per share.  As mentioned above, in the fourth quarter of 2010 we closed the sale of MUSE.  We included in the net loss from continuing operations a $6.0 million loss on the early extinguishment of long term debt repaid in conjunction with the MUSE sale and recorded a $13.7 million gain from the sale of MUSE, which is included in the net income from discontinued operations.  Also included in the results from continuing operations in 2009 is $31.4 million in revenue, previously deferred, from the sale of Evamist.  

Cash, Cash Equivalents and Available-for-Sale Securities

VIVUS had cash, cash equivalents and available-for-sale securities (U.S. Treasuries) of $139.2 million at December 31, 2010, as compared to $206.8 million at December 31, 2009.  The change in cash, cash equivalents and available-for-sale securities of $67.6 million for the year is the net result of cash used for operating and financing activities, including the proceeds from the MUSE sale and the payoff of long term debt.

About VIVUS

VIVUS is a biopharmaceutical company developing therapies to address obesity, sleep apnea, diabetes and male sexual health. The company's lead investigational product in clinical development, QNEXA, has completed phase 3 clinical trials for the treatment of obesity and is currently being considered for approval by US regulators. QNEXA is also in phase 2 clinical development for the treatment of type 2 diabetes and obstructive sleep apnea. In the area of sexual health, VIVUS is in phase 3 development with avanafil, a PDE5 inhibitor being studied for the treatment of erectile dysfunction. For more information about the company, please visit www.vivus.com. For more information about the company, please visit www.vivus.com.

Note to Investors

As previously announced, VIVUS will hold a conference call and an audio webcast to discuss the fourth quarter and year-end financial results today, February 28, 2011, beginning at 1:30 p.m. Pacific Time. You can listen to this call by dialing 1-877-359-2916 and outside the U.S. 1-224-357-2386. A webcast replay will be available for 30 days and can be accessed at http://ir.vivus.com/.

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as "anticipate," "believe," "forecast," "estimated" and "intend," among others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements.  These factors include, but are not limited to, the timing and substance of our response to the FDA's requests from the End of Review meeting, our response to the FDA's complete response letter, or CRL; the feasibility assessment of performing a retrospective observational study of infants born to mothers exposed to 100 mg of topiramate for migraine prophylaxis during pregnancy and the results, if any, from the retrospective observational study, the FDA's interpretation of and agreement with the information VIVUS submitted relating to teratogenicity and cardiovascular safety; the FDA's meeting minutes; the FDA's interpretation of the data from our SEQUEL study, or OB-305; the FDA's requests, if any, to conduct additional clinical trials, provide further analysis of clinical trial data or to conduct retrospective observational studies; substantial competition; the impact on future sales under a limited label and restrictions on distribution; uncertainties of litigation and intellectual property and patent protection; reliance on sole-source suppliers; limited sales and marketing resources and dependence upon third parties; risks related to the development of innovative products; risks related to the failure to obtain FDA or foreign authority clearances or approval; noncompliance with FDA or foreign  regulations; and our dependence on the performance of our collaborative partners.  As with any pharmaceutical in development, there are significant risks in the development, the regulatory approval, and commercialization of new products.  There are no guarantees that our response to the FDA's CRL or their request stemming from the End of Review meeting will be sufficient to satisfy the FDA's safety concerns, and that the FDA will not require us to conduct any additional clinical or non-clinical observational studies, or that any product will receive regulatory approval for any indication or prove to be commercially successful.  VIVUS does not undertake an obligation to update or revise any forward-looking statements.  Investors should read the risk factors set forth in VIVUS' Form 10-K for the year ending December 31, 2009, and periodic reports filed with the Securities and Exchange Commission.

CONTACT:  






VIVUS, Inc.

Investor Relations:

The Trout Group

Timothy E. Morris


Brian Korb

Chief Financial Officer


646-378-2923

650-934-5200





VIVUS, Inc.    

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS      

(in thousands, except per share amounts)


















Three Months Ended


Years Ended






December 31


December 31


December 31


December 31






2010


2009


2010


2009*






(unaudited)


(unaudited)


(unaudited)



Revenue:











License and other revenue


$                      -


$                      -


$                      -


$             31,395













Operating expenses:











Research and development


6,093


13,521


39,971


70,940


General and administrative


7,018


3,685


25,656


13,870















Total operating expenses


13,111


17,206


65,627


84,810













Loss from operations



(13,111)


(17,206)


(65,627)


(53,415)













Interest and other income (expense), net of loss on early extinguishment of debt and other-than-temporary loss on impaired securities

(6,000)


(725)


(9,798)


(2,349)













Loss from continuing operations









   before income taxes



(19,111)


(17,931)


(75,425)


(55,764)













Benefit (provision) for income taxes

(8)


2,388


(9)


2,379













Net loss from continuing operations

(19,119)


(15,543)


(75,434)


(53,385)













Net income (loss) from discontinued operations











12,608


2,331


9,369


(906)













Net loss



$             (6,511)


$           (13,212)


$           (66,065)


$           (54,291)













Basic and diluted net income (loss)








   per share:












Continuing operations


$               (0.23)


$               (0.19)


$               (0.93)


$               (0.74)



Discontinued operations


0.15


0.03


0.11


(0.01)

Net loss per share



$               (0.08)


$               (0.16)


$               (0.82)


$               (0.75)













Shares used in per share computation:










Basic



81,288


80,581


81,017


72,779



Diluted



83,541


83,672


83,821


72,779













*The Condensed Consolidated Statement of Operations at December 31,

2009 has been derived from the Company's audited financial statements

at that date.



VIVUS, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value amount)


December 31


December 31


2010


2009*


(unaudited)



Current assets:





Cash and cash equivalents

$                    37,216


$                  40,533


Available-for-sale securities  

101,970


166,241


Inventories

3,225


-


Prepaid expenses and other assets

1,648


4,106


Current assets of discontinued operations

6


12,482



Total current assets

144,065


223,362

Property and equipment, net

221


259

Non-current assets of discontinued operations

-


6,411



Total assets

$                  144,286


$                230,032





Current liabilities:





Accounts payable

$                      2,395


$                    8,082


Accrued and other liabilities

6,377


6,769


Current liabilities of discontinued operations

3,512


7,659



Total current liabilities

12,284


22,510





Notes payable-net of current portion

-


15,255

Non-current liabilities of discontinued operations

-


5,541



Total liabilities

12,284


43,306





Commitments and contingencies








Stockholders' equity:





Common stock; $.001 par value; shares  






authorized 200,000; shares outstanding -






81,568 at December 31, 2010;






80,607 at December 31, 2009, respectively

82


81


Additional paid-in capital  

432,041


420,708


Accumulated other comprehensive income (loss)

4


(3)


Accumulated deficit

(300,125)


(234,060)



Total stockholders' equity

132,002


186,726



Total liabilities and stockholders' equity

$                  144,286


$                230,032





*The Condensed Consolidated Balance Sheet at December 31, 2009 has
been derived from the Company's audited financial statements at that date.



SOURCE VIVUS, Inc.

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