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Vivus (NASDAQ:VVUS) received positive news in Europe on its erectile dysfunction drug Spedra. While Vivus has not seen favor in Europe or strong sales in the U.S. on its anti-obesity drug Qsymia, the Spedra news was enough to send Vivus up above $13 before settling back down to the high $12's.

The European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending the granting of a marketing authorization for avanafil, SPEDRA, for the treatment of erectile dysfunction (ED) in the European Union. With the positive recommendation in hand, the issue now moves over to the European Commission. That process is estimated to take as long as 60 days, but the toughest hurdle in Europe regarding Spedra is now behind Vivus. What is left at this point is pretty much a formality.

"We are pleased with the positive recommendation of the CHMP to support the approval of SPEDRA," said Peter Tam, president of VIVUS, Inc. "This positive opinion marks another important milestone in the drug development history of VIVUS. We could not have accomplished this without the longstanding collaboration and support of our partner Mitsubishi Tanabe Pharma Corporation and our European team of advisors and consultants, all of whom have worked diligently on the application. If approval of the MAA is granted by the EC, we expect to complete our partnering discussions on a timely basis to allow for the commercialization of SPEDRA in the EU."

While many investors in Vivus had pinned hopes of company success on anti-obesity drug Qsymia, it appears that there is potential with the ED market for Vivus as well. The competitive market for ED treatments has some pretty big players, but perhaps Vivus can enter the ring respectably while it still waits for the anti-obesity market for Qsymia to mature.

At the moment Vivus has the only prescription anti-obesity treatment on the market with Qsymia. Some restrictions on the drug were recently relaxed, which will allow that drug to be sold in certified retail pharmacies instead of just mail order. Vivus will be joined on the market shortly by Arena (NASDAQ:ARNA) and its drug Belviq and Orexigen (NASDAQ:OREX) with its drug Contrave.

For Vivus investors the positive news in the ED market is welcomed, but this company is not yet out of the woods. The anti-obesity sector is the important sector for Vivus and getting sales levels to numbers that can show a path to profits is what it will take for a Vivus investment to pan out. The company has some substantial testing to conduct which will not be cheap. Vivus has to find a way to improve cash flow or we may see debt and/or dilution in the not too distant future. The ED market will help, but it is likely not the complete answer. Stay Tuned.

Source: Vivus Gets Positive Development In Europe

Additional disclosure: I have no position in Vivus or Orexigen