VIVUS Reports Second Quarter 2009 Financial Results

Aug 11, 2009

MOUNTAIN VIEW, Calif., Aug 11, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- VIVUS, Inc. (Nasdaq: VVUS), a biopharmaceutical company dedicated to the development and commercialization of novel therapeutic products, today reported its financial results for the second quarter ended June 30, 2009.

Second Quarter Results

Net loss for the second quarter of 2009 was $13.2 million, or $0.19 per share, as compared to net income of $3.6 million, or $0.06 per share, for the second quarter of 2008. The net loss in the second quarter of 2009 as compared to the net income in the second quarter of 2008 is primarily due to a decrease in license and other revenue as a result of the last portion of K-V Pharmaceutical ("K-V") deferred license revenue being recognized in the second quarter of 2009, and increased operating expenses. The increase in operating expenses, as compared to the second quarter of 2008, was primarily attributable to spending related to our phase 3 clinical trials of avanafil, our investigational product candidate for the treatment of erectile dysfunction. Spending on Qnexa, our investigational product for obesity, was consistent quarter over quarter.

Total revenue for the second quarter of 2009 was $14.7 million, as compared to $25.3 million for the second quarter of 2008. Product revenues from the sale of MUSE in the second quarter of 2009 were $4.1 million, as compared to $4.2 million in the second quarter of 2008. License and other revenue of $10.6 million and $21 million in the second quarters of 2009 and 2008, respectively, primarily relates to the sale in 2007 of Evamist to K-V. All of the deferred revenue related to the sale of Evamist has now been recognized. Since we had received the $150 million in cash from the sale of Evamist and we had no related contingencies, the recognition of license revenue and the corresponding reduction of deferred revenue related to the Evamist sale had no impact on our cash flows from operations in 2009 or 2008.

Six Month Results

Net loss for the six months ended June 30, 2009 was $20 million, or $0.29 per share, compared to a net loss of $3.5 million or $0.06 per share for the same period in 2008. The increase in the net loss in the six months ended June 30, 2009 as compared to the same period in 2008 is primarily due to the decrease in K-V deferred license revenue, an increase in operating expenses primarily due to our phase 3 clinical trials of avanafil and increased legal expenses and costs related to the Acrux arbitration and a decrease in interest income. With the completion of the Acrux arbitration, legal expenses are expected to decrease in the second half of 2009. For the six-month period ending June 30, 2009, total revenues were $37 million, compared to $48 million for the same period in 2008. The decrease in total revenues is primarily due to the reduction in K-V deferred license revenue in the six months ended June 30, 2009.

Cash, Cash Equivalents and Available for Sale Securities

VIVUS had cash, cash equivalents and available-for-sale securities of $144.2 million at June 30, 2009, as compared to $189.2 million at December 31, 2008. The decrease in cash, cash equivalents and available-for-sale securities of $45 million is the net result of cash used for operating and investing activities partially offset by cash provided by financing activities, including $6.7 million in cash from the Deerfield financing received in the first six months of 2009.

Qnexa Update

The phase 3 Qnexa development program remains on schedule. In total, over 3,750 patients were enrolled in two 56-week studies. The EQUIP study (OB-302) will determine the impact of Qnexa on patients that are considered morbidly obese (BMI>35). The CONQUER study (OB-303) enrolled patients that are considered overweight (BMI>27) with at least two co-morbidities including high blood pressure, high cholesterol and type 2 diabetics. Top-line results for both of these studies are expected in the third quarter of 2009.

"The highlight of the second quarter was the two podium presentations of Qnexa at this year's American Diabetes Association Scientific Session. The medical and scientific communities have long recognized the link between obesity and type 2 diabetes. Now they are beginning to recognize the importance of weight loss in the treatment of type 2 diabetes. The top-line results from the year-long studies of Qnexa for the treatment of obesity are expected in the third quarter of 2009. Progress on the preparation of the NDA for Qnexa in obesity also remains on schedule for an expected filing by the end of 2009," stated Leland Wilson, president and chief executive officer of VIVUS. "Pivotal studies for avanafil for the treatment of erectile dysfunction are also in process, with results expected in the fourth quarter of 2009."


VIVUS is a biopharmaceutical company developing innovative, next-generation therapies to address obesity, diabetes and sexual health. The company's lead product in clinical development, Qnexa(TM), is expected to complete phase 3 clinical trials for the treatment of obesity in 2009. Qnexa is also in phase 2 clinical development for the treatment of type 2 diabetes. In the area of sexual health, VIVUS is in phase 3 development with avanafil, a PDE5 inhibitor, and in phase 3 development of Luramist(TM) for the treatment of hypoactive sexual desire disorder (HSDD). For more information about the company, please visit

Note to Investors

As previously announced, VIVUS will hold a conference call to discuss the second quarter financial results today, August 11, 2009, beginning at 1:30 p.m. Pacific Time. You can listen to this call by dialing 1-877-548-7907 and outside the U.S. 1-719-325-4848. A 30-day archive of the call can be accessed at

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. These forward-looking statements are based on VIVUS' current expectations and actual results could differ materially. 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, substantial competition; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; reliance on sole source suppliers; limited sales and marketing efforts and dependence upon third parties; risks related to the development of innovative products; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical studies or regulatory submissions discussed in this press release will be completed or successful 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 statement. Investors should read the risk factors set forth in VIVUS' Form 10-K for the year ended December 31, 2008 and periodic reports filed with the Securities and Exchange Commission.


    VIVUS, Inc.                Investor Relations: The Trout Group
    Timothy E. Morris                              Brian Korb
    Chief Financial Officer                        646-378-2923
                               Media Relations:    Pure Communications, Inc.
                                                   Sheryl Seapy

                                    VIVUS, Inc.
                     (in thousands, except per share amounts)

                                   Three Months Ended     Six Months Ended
                                   June 30,   June 30,   June 30,   June 30,
                                     2009       2008       2009       2008
       US product, net             $   3,368  $  2,923 $   4,261  $  4,011
       International product             776     1,300     1,069     1,854
       License and other revenue      10,581    21,046    31,627    42,092

          Total revenue               14,725    25,269    36,957    47,957

    Operating expenses:
       Cost of goods sold and
        manufacturing                  2,877     2,929     5,480     5,716
       Research and development       20,258    15,335    40,327    38,706
       Selling, general and
        administrative                 4,555     4,345     9,966     8,597

          Total operating expenses    27,690    22,609    55,773    53,019

    Income (loss) from operations    (12,965)    2,660   (18,816)   (5,062)

    Interest (expense) income,
     net of other-than-temporary
     loss on impaired securities        (239)      924    (1,191)    1,559

    Income (loss) before provision
     for income taxes                (13,204)    3,584   (20,007)   (3,503)

    Provision for income taxes             -        (5)       (6)      (10)

          Net income (loss)        $ (13,204) $  3,579 $ (20,013) $ (3,513)

    Net income (loss) per share:
          Basic and diluted        $   (0.19) $   0.06 $   (0.29) $  (0.06)

    Shares used in per share
          Basic                       69,805    60,351    69,746    59,616
          Diluted                     69,805    61,850    69,746    59,616

                                   VIVUS, Inc.
                    (in thousands, except par value amount)

                                                  June 30     December 31
                                                    2009         2008*
    Current assets:
       Cash and cash equivalents               $    27,820   $    66,121
       Available-for-sale securities               116,404       121,789
       Accounts receivable, net                      3,395         4,157
       Inventories, net                              2,662         3,041
       Prepaid expenses and other assets             3,443         3,744
          Total current assets                     153,724       198,852
       Property and equipment, net                   6,287         6,726
       Restricted cash                                 700           700
       Available-for-sale securities                     -         1,344
          Total assets                         $   160,711   $   207,622

    Current liabilities:
       Accounts payable                        $     9,632   $    17,205
       Deferred revenue                                462        31,858
       Accrued and other liabilities                17,940        14,909
          Total current liabilities                 28,034        63,972

    Notes payable-net of current portion            16,809        11,177
    Deferred revenue                                 1,029         1,260
          Total liabilities                         45,872        76,409

    Commitments and contingencies

    Stockholders' equity:
       Common stock; $.001 par value; shares
        authorized 200,000;  shares outstanding -
        69,960 at June 30, 2009;
        69,667 at December 31, 2008                     70            70
       Additional paid-in capital                  314,282       310,558
       Accumulated other comprehensive income          269           354
       Accumulated deficit                       (199,782)     (179,769)
          Total stockholders' equity               114,839       131,213
          Total liabilities and stockholders'
           equity                                 $160,711      $207,622

    *The Condensed Consolidated Balance Sheet at December 31, 2008 has been
     derived from the Company's audited financial statements at that date.


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