Racked With Losses, Vivus is Putting All Its Eggs in This Basket
Biopharmaceutical company Vivus (NASDAQ:VVUS) is banking big on its newly approved pill that is expected to provide erections within 15 minutes, about half the time of Pfizer’s (NYSE:PFE) popular Viagra. The company will need the potentially lucrative product to come good after reporting first-quarter net loss of $18.8 million or 20 cents per share on Monday, even bigger than its $9.9 million loss in the same quarter last year. On average, analysts had expected the company to report a loss of 14 cents per share.
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Vivus’s Avanafil, which will be sold under the brand name Stendra, is the first new drug in the category in a decade. Along with Viagra, it will compete with Eli Lilly’s (NYSE:LLY) Cialis and GlaxoSmithKline (NYSE:GSK) and Bayer’s Levitra. Some experts believe Avanafil may earn Vivus $68 million in sales next year.
A majority of the first-quarter loss was attributed to higher general and administrative expenses from spending on Qnexa pre-commercialization activities. The company developed a risk evaluation and mitigation strategy in an effort to win approval for the drug. Earlier last month, the Food and Drug Administration had extended the target date of weight-loss drug Qnexa approval to July 17 from April 17.
Vivus said it had cash and cash equivalents of $333.4 million at the end of the quarter, up from $146.8 million in the previous quarter, helped largely from the proceeds of a public offering of the company’s stock in March.