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VIVUS Reports Second Quarter and First Six Months 2013 Financial Results

MOUNTAIN VIEW, Calif., Aug. 6, 2013 (GLOBE NEWSWIRE) -- VIVUS,Inc. (Nasdaq:VVUS) ("VIVUS"), which sells the obesity drug Qsymia® (phentermine and topiramate extended-release) capsules CIV in the United States, today provided a business update and reported its financial results for the second quarter and six months ended June 30, 2013.

Recent Highlights

Second Quarter Financial Results

In the second quarter of 2013, net product revenue from sales of Qsymia was $5.5 million. For the quarter ended June 30, 2013, we reported a net loss of $55.5 million, or $0.55 net loss per share, as compared to a net loss of $24.0 million, or $0.24 net loss per share during the second quarter of 2012. The increased net loss in the second quarter of 2013, as compared to the second quarter of 2012, is primarily attributable to increased selling, general and administrative expenses related to commercialization activities for Qsymia. Included in the net loss for the quarter ended June 30, 2013 were $2.8 million related to the proxy contest and a total charge of $4.4 million for Qsymia inventories on hand in excess of demand, plus a purchase commitment fee due to the manufacturer of Qsymia.

For the second quarter of 2013, there were approximately 81,000 Qsymia prescriptions dispensed, of which approximately 24,000 were dispensed under the Free Trial Offer. All of these prescriptions were dispensed through the certified mail order home delivery system. As patients switch to retail, we anticipate that the future number of prescriptions dispensed through the mail order system will decline and prescriptions dispensed through certified retail pharmacies will grow and eventually surpass the number of prescriptions currently dispensed through mail order.

First Half Financial Results

Net product revenue from sales of Qsymia in the first half of 2013 was $9.6 million. For the six months ended June 30, 2013, we reported a net loss of $109.1 million, or $1.08 net loss per share, as compared to a net loss of $42.8 million, or $0.45 net loss per share during the first half of 2012. The increased net loss in the first half of 2013 is again primarily attributable to increased selling, general and administrative expenses related to commercialization activities for Qsymia. Included in the net loss for the six months ended June 30, 2013 were $3.5 million related to the proxy contest and a total charge of $10.2 million for Qsymia inventories, including a purchase commitment fee, as explained above.

Cash, Cash Equivalents and Available-for-Sale Securities

Cash, cash equivalents and available-for-sale securities (cash) totaled $358.3 million at June 30, 2013, as compared to $214.6 million at December 31, 2012. The increase of $143.7 million is primarily due to net cash provided by financing activities, including the net proceeds of $48.4 million from the Senior Secured Notes with BioPharma and $241.8 million from the Convertible Notes, less cash used to purchase capped calls of $34.7 million and cash used in operating activities of $110.3 million.

Note to Investors

As previously announced, VIVUS will hold a conference call and an audio webcast to discuss the second quarter and first six months of 2013 financial results today, August 6, 2013, beginning at 1:30PM Pacific Time. Investors can listen to this call by dialing 1-877-359-2916 and outside the U.S. 224-357-2386. A webcast replay will be available for 30 days and can be accessed at http://ir.vivus.com/.

About Qsymia

Qsymia is approved in the U.S. and is indicated as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI) of 30 kg/m2 or greater (obese) or 27 kg/m2 or greater (overweight) in the presence of at least one weight-related medical condition such as high blood pressure, type 2 diabetes, or high cholesterol.

The effect of Qsymia on cardiovascular morbidity and mortality has not been established. The safety and effectiveness of Qsymia in combination with other products intended for weight loss, including prescription and over-the-counter drugs, and herbal preparations, have not been established.

Important Safety Information

Qsymia® (phentermine and topiramate extended-release) capsules CIV is contraindicated in pregnancy; in patients with glaucoma; in hyperthyroidism; in patients receiving treatment or within 14 days following treatment with monoamine oxidase inhibitors (MAOIs); or in patients with hypersensitivity to sympathomimetic amines, topiramate, or any of the inactive ingredients in Qsymia.

Qsymia can cause fetal harm. Females of reproductive potential should have a negative pregnancy test before treatment and monthly thereafter and use effective contraception consistently during Qsymia therapy. If a patient becomes pregnant while taking Qsymia, treatment should be discontinued immediately, and the patient should be informed of the potential hazard to the fetus.

The most commonly observed side effects in controlled clinical studies, 5% or greater and at least 1.5 times placebo, include paraesthesia, dizziness, dysgeusia, insomnia, constipation, and dry mouth.

About Avanafil

SPEDRA™, the trade name for avanafil in the EU, has been approved by the EMA for the treatment of erectile dysfunction in the EU.

STENDRA is approved by the FDA for the treatment of erectile dysfunction in the U.S. VIVUS, through collaboration arrangements with third parties, intends to market and sell STENDRA in the U.S. and under the trade name SPEDRA in the EU and other territories outside the U.S. Avanafil is licensed from Mitsubishi Tanabe Pharma Corporation (MTPC). VIVUS owns worldwide development and commercial rights to avanafil for the treatment of sexual dysfunction, with the exception of certain Asian-Pacific Rim countries.

VIVUS has granted an exclusive license to the Menarini Group, through its subsidiary Berlin-Chemie AG, to commercialize and promote SPEDRA for the treatment of erectile dysfunction in over 40 European countries plus Australia and New Zealand. VIVUS is currently in discussions with potential partners to commercialize STENDRA in the U.S. and its other territories throughout the world.

For more information about STENDRA, please visit www.Stendra.com.

Important Safety Information

STENDRA™ (avanafil) is prescribed to treat erectile dysfunction (ED).

Do not take STENDRA if you take nitrates, often prescribed for chest pain, as this may cause a sudden, unsafe drop in blood pressure.

Discuss your general health status with your healthcare provider to ensure that you are healthy enough to engage in sexual activity. If you experience chest pain, nausea, or any other discomforts during sex, seek immediate medical help.

STENDRA may affect the way other medicines work. Tell your healthcare provider if you take any of the following; medicines called HIV protease inhibitors, such as ritonavir (Norvir®), indinavir (Crixivan®), saquinavir (Fortavase® or Invirase®) or atazanavir (Reyataz®); some types of oral antifungal medicines, such as ketoconazole (Nizoral®), and itraconazole (Sporanox®); or some types of antibiotics, such as clarithromycin (Biaxin®), telithromycin (Ketek®), or erythromycin.

In the rare event of an erection lasting more than 4 hours, seek immediate medical help to avoid long-term injury.

In rare instances, men taking PDE5 inhibitors (oral erectile dysfunction medicines, including STENDRA) reported a sudden decrease or loss of vision. It is not possible to determine whether these events are related directly to these medicines or to other factors. If you experience sudden decrease or loss of vision, stop taking PDE5 inhibitors, including STENDRA, and call a doctor right away.

Sudden decrease or loss of hearing has been rarely reported in people taking PDE5 inhibitors, including STENDRA. It is not possible to determine whether these events are related directly to the PDE5 inhibitors or to other factors. If you experience sudden decrease or loss of hearing, stop taking STENDRA and contact a doctor right away. If you have prostate problems or high blood pressure for which you take medicines called alpha blockers or other anti-hypertensives, your doctor may start you on a lower dose of STENDRA.

Drinking too much alcohol when taking STENDRA may lead to headache, dizziness, and lower blood pressure.

STENDRA in combination with other treatments for ED is not recommended.

STENDRA does not protect against sexually transmitted diseases, including HIV.

The most common side effects of STENDRA are headache, flushing, runny nose and congestion.

Please see full patient prescribing information for STENDRA (50 mg, 100 mg, 200 mg) tablets.

About VIVUS

VIVUS is a biopharmaceutical company commercializing and developing innovative, next-generation therapies to address unmet needs in obesity, sleep apnea, diabetes and sexual health. For more information about the company, please visit www.vivus.com.

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks, uncertainties and other factors, including risks and uncertainties related to our ability to continue to certify and add to the Qsymia retail pharmacy network and sell Qsymia through this network; risks and uncertainties related to the milestones, payments and royalties under the SPEDRA Agreement; risks and uncertainties related to filing an amendment to the current STENDRA and SPEDRA labels to include recent study results; risks and uncertainties related to the number of prescriptions dispensed through the mail order system and through certified retail pharmacies; risks and uncertainties related to the completion of our STENDRA partnering discussions on acceptable terms and on a timely basis; and risks and uncertainties related to the launch and commercialization of SPEDRA in the EU. These risks and uncertainties could cause actual results to differ materially from those referred to in these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. Investors should read the risk factors set forth in VIVUS's Form 10-K for the year ending December 31, 2012, as amended by the Form 10-K/A filed on April 30, 2013 and by the Form 10-K/A filed on June 12, 2013, and periodic reports filed with the Securities and Exchange Commission. VIVUS does not undertake an obligation to update or revise any forward-looking statements.

VIVUS, Inc. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(in thousands, except per share amounts)
(Unaudited)
         
 Three Months EndedSix Months Ended
 June 30June 30June 30June 30
 2013201220132012
         
Revenue:        
Net product revenue  $ 5,534  $ --  $ 9,646  $ --
         
Operating expenses:        
Cost of goods sold 572  -- 962  --
Inventory impairment and commitment fee 4,448  -- 10,225  --
Research and development  9,232  8,873  16,278  15,007
Selling, general and administrative  42,727  15,444  87,423  28,082
         
Total operating expenses  56,979  24,317  114,888  43,089
         
Loss from operations  (51,445)  (24,317)  (105,242)  (43,089)
         
Interest and other income (expense), net  (4,183)  54  (4,148)  71
         
Loss from continuing operations before income taxes  (55,628)  (24,263)  (109,390)  (43,018)
         
Provision for income taxes  (7)  (3)  (13)  (10)
         
Loss from continuing operations  (55,635)  (24,266)  (109,403)  (43,028)
         
Income from discontinued operations  123  218  315  202
         
Net loss  $ (55,512)  $ (24,048)  $ (109,088)  $ (42,826)
         
Basic and diluted net income (loss) per share:        
Continuing operations  $ (0.55)  $ (0.24)  $ (1.08)  $ (0.45)
Discontinued operations  --  --  --  --
Net loss per share  $ (0.55)  $ (0.24)  $ (1.08)  $ (0.45)
         
Shares used in per share computation:        
Basic and diluted 100,739 99,777 100,700 96,022
 
VIVUS, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
     
 June 30December 31
 20132012*
  (unaudited)  
Current assets:    
Cash and cash equivalents  $ 124,713  $ 58,605
Available-for-sale securities   233,542  155,981
Accounts receivable, net  5,085  2,778
Inventories  34,217  25,353
Prepaid expenses and other assets  18,338  19,159
Total current assets  415,895  261,876
Property and equipment, net  3,329  1,951
Non-current assets   7,788  287
Total assets  $ 427,012  $ 264,114
     
Current liabilities:    
Accounts payable  $ 16,777  $ 25,375
Accrued and other liabilities  16,047  14,680
Deferred revenue  2,846  1,150
Total current liabilities  35,670  41,205
Long term debt  206,220  --
Total liabilities  241,890  41,205
     
Commitments and contingencies    
     
Stockholders' equity:    
Common stock and additional paid-in capital  780,382  709,022
Accumulated other comprehensive income   (26)  33
Accumulated deficit   (595,234)  (486,146)
Total stockholders' equity  185,122  222,909
Total liabilities and stockholders' equity  $ 427,012  $ 264,114
     
*The Condensed Consolidated Balance Sheet at December 31, 2012 has been derived from the Company's audited financial statements at that date.
CONTACT: VIVUS, Inc.

         Timothy E. Morris

         Chief Financial Officer

         morris@vivus.com

         650-934-5200

         

         Investor Relations:  The Trout Group

         Brian Korb

         bkorb@troutgroup.com

         646-378-2923

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