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VIVUS Reports Third Quarter 2014 Financial Results

MOUNTAIN VIEW, CA -- (Marketwired) -- 11/05/14 -- VIVUS, Inc. (NASDAQ: VVUS), a biopharmaceutical company commercializing Qsymia® (phentermine and topiramate extended-release) capsules CIV for the treatment of obesity, today reported its financial results for the third quarter ended September 30, 2014 and provided a business update.

"While the obesity market develops, we are encouraged by an improving reimbursement environment for Qsymia, increasing net revenue per prescription, and feedback from clinicians who emphasize that our product delivers on the promise of clinically significant weight loss," said Seth H. Z. Fischer, CEO. "Because of its favorable efficacy and safety profile, combined with actual clinical experience since launch, Qsymia is top-of-mind in many conversations taking place about obesity, whether among key healthcare providers, payers, patients or policy makers."

Seth continued: "Additionally, we were pleased to announce in September 2014 the approval by FDA of our supplemental new drug application for STENDRA® (avanafil), making it the only erectile dysfunction medication indicated to be taken as early as approximately 15 minutes before sexual activity."

"Finally, the control of our operating expenses remains a key area of focus, and we continue to make good progress in this regard," Seth added.

Third Quarter 2014 Financial Results
Total net revenue was $33.9 million for the third quarter of 2014, compared to $27.4 million for the third quarter of 2013. Of the total revenue for the current quarter, net product revenue was $12.5 million from sales of Qsymia, compared to $6.4 million for the third quarter of 2013. In addition, under our commercialization agreements for STENDRA® and SPEDRA, we recognized $15.1 million in license and milestone revenue, compared to $21.0 million in the third quarter of 2013. We also recognized $5.3 million in supply revenue and $1.1 million in royalty revenue for the current quarter.

Total research and development expense was $2.6 million for the current quarter, compared to $8.4 million for the third quarter of 2013.

Total selling, general and administrative expense was $27.8 million for the current quarter, compared to $38.2 million for the third quarter of 2013. Selling and marketing expenses for the commercialization of Qsymia totaled $18.4 million for the current quarter, compared to $22.6 million for the third quarter of 2013.

Inventory impairment and other non-recurring charges were $4.1 million in the current quarter, comprised of $2.2 million for inventory impairment and $1.9 million for patent settlement. In the third quarter of 2013, we incurred $20.7 million in non-recurring charges related to the proxy contest.

Net loss was $15.8 million, or $0.15 net loss per share, for the current quarter, compared to a net loss of $48.2 million, or $0.48 net loss per share, for the third quarter of 2013.

There were approximately 140,000 Qsymia prescriptions dispensed in the third quarter of 2014, compared to 138,000 prescriptions in the second quarter of 2014 and 109,000 in the third quarter of 2013.

Cash, Cash Equivalents and Available-for-Sale Securities
Cash, cash equivalents and available-for-sale securities (collectively cash) totaled $306.9 million at September 30, 2014, compared to $343.3 million at December 31, 2013. In the first nine months of 2014, we received approximately $27.4 million in license and milestone payments related to STENDRA and SPEDRA.

Business Update

Note to Investors
As previously announced, VIVUS will hold a conference call and an audio webcast to discuss the third quarter ended September 30, 2014 financial results today, November 5, 2014, beginning at 4:30PM Eastern Time. Investors may listen to this call by dialing (877) 359-2916 from within the U.S. and ++ (224) 357-2386 from outside the U.S. A webcast replay will be available for 30 days and may 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
STENDRA® (avanafil) is approved in the U.S. by the FDA for the treatment of erectile dysfunction. VIVUS has granted Auxilium Pharmaceuticals, Inc. exclusive marketing rights to STENDRA in the U.S. and Canada.

SPEDRA, the trade name for avanafil in the EU, is approved by the European Medicines Agency (EMA) for the treatment of erectile dysfunction in the EU. 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 has granted an exclusive license to Sanofi to commercialize avanafil in Africa, the Middle East, Turkey, and the Commonwealth of Independent States (CIS) including Russia.

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 is in discussions with other parties for the commercialization rights to its remaining territories.

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 Qsymia® (phentermine and topiramate extended-release) capsules CIV for the treatment of obesity. 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 the development of the obesity market and the success of Qsymia as a treatment option, as well as an improving reimbursement environment for Qsymia, increasing net revenue per prescription and feedback from clinicians who emphasize that our product delivers on the promise of clinically significant weight loss; and risks and uncertainties related to the STENDRA label expansion and its effect on patients and healthcare providers, including the success of STENDRA as a treatment option. 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 ended December 31, 2013 as filed on February 28, 2014 and as amended by the Form 10-K/A filed on April 30, 2014, 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 data)
(Unaudited)
 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2014     2013     2014     2013  
Revenue:                                
  Net product revenue   $ 12,454     $ 6,379     $ 32,575     $ 16,025  
  License and milestone revenue     15,070       21,000       38,614       21,000  
  Supply revenue     5,300       -       18,336       -  
  Royalty revenue     1,053       -       2,924       -  
    Total revenue     33,877       27,379       92,449       37,025  
                                 
Operating expenses:                                
  Cost of goods sold     7,268       741       23,816       1,703  
  Research and development     2,574       8,405       11,083       24,683  
  Selling, general and administrative     27,828       38,167       84,703       121,666  
  Inventory impairment and other non-recurring charges     4,119       20,743       6,173       34,892  
    Total operating expenses     41,789       68,056       125,775       182,944  
                                 
Loss from operations     (7,912 )     (40,677 )     (33,326 )     (145,919 )
                                 
Total interest expense and other expense (income), net     8,135       7,669       24,534       11,817  
Loss from continuing operations before income taxes     (16,047 )     (48,346 )     (57,860 )     (157,736 )
Provision for (benefit from) income taxes     (222 )     33       (660 )     46  
Loss from continuing operations     (15,825 )     (48,379 )     (57,200 )     (157,782 )
Income from discontinued operations, net of tax     -       175       -       490  
    Net loss   $ (15,825 )   $ (48,204 )   $ (57,200 )   $ (157,292 )
                                 
Basic and diluted net loss per share:                                
  Continuing operations   $ (0.15 )   $ (0.48 )   $ (0.55 )   $ (1.56 )
  Discontinued operations     -       -       -       -  
    Net loss per share   $ (0.15 )   $ (0.48 )   $ (0.55 )   $ (1.56 )
Shares used in per share computation:                                
  Basic and diluted     103,477       100,904       103,373       100,769  
                                   
 
VIVUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
      September 30,     December 31,  
      2014     2013*  
      (Unaudited)        
               
Current assets:                  
  Cash and cash equivalents     $ 83,163     $ 103,262  
  Available-for-sale securities       223,710       240,024  
  Accounts receivable, net       27,099       12,214  
  Inventories       38,105       48,503  
  Prepaid expenses and other assets       10,383       19,938  
    Total current assets       382,460       423,941  
Property and equipment, net       1,506       1,954  
Non-current assets       7,857       5,901  
    Total assets     $ 391,823     $ 431,796  
                   
                   
Current liabilities:                  
  Accounts payable     $ 8,235     $ 10,759  
  Accrued and other liabilities       29,264       23,993  
  Deferred revenue       20,243       17,255  
    Total current liabilities       57,742       52,007  
Long-term debt, net of current portion       217,110       213,106  
Deferred revenue, net of current portion       9,466       10,360  
Non-current accrued and other liabilities       1,553       2,954  
    Total liabilities       285,871       278,427  
                   
Commitments and contingencies       -       -  
Stockholders' equity:                  
  Common stock and additional paid-in capital       823,656       813,905  
  Accumulated other comprehensive income       98       66  
  Accumulated deficit       (717,802 )     (660,602 )
    Total stockholders' equity       105,952       153,369  
    Total liabilities and stockholders' equity     $ 391,823     $ 431,796  
 
* The Condensed Consolidated Balance Sheet at December 31, 2013 has been derived from the Company's audited financial statements at that date.
 

VIVUS, Inc.
Dana B. Shinbaum
Corporate Development & Investor Relations
shinbaum@vivus.com
650-934-5200

Investor Relations: The Trout Group
Brian Korb
Senior Vice President
bkorb@troutgroup.com
646-378-2923

Source: VIVUS, Inc.

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