Vivus Lands Partner For ED Drug

Oct.11.13 | About: Vivus, Inc. (VVUS)

Vivus (NASDAQ:VVUS) announced today that the company has signed a deal for the erectile dysfunction drug Stendra for sale and marketing in the United States and Canada. Vivus and Auxilium Pharmaceuticals, Inc. (AUXL) inked a deal giving Auxillium the exclusive rights to market the drug Stendra (avanafil) in exchange for $30 million in an upfront payment with Vivus, which is eligible to receive up to $270 million more based on certain regulatory and sales milestones. Vivus will also receive a royalty on sales.

For Vivus, this has been a long time coming. The cash infusion will certainly help the company, but more importantly, Stendra may be getting much closer to actually being on the market, rather than its current status as an approved drug sitting on a shelf.

Auxilium indicated it expects to begin its commercial launch of Stendra by the end of this year, and that promotional activity started after the new year. The company intends to launch with about 150 representatives which will target urologists, endocrinologists and certain high prescribing primary care physicians.

Stendra is also approved in Europe under the name Spedra. In July Vivus announced a European partnership with Menarini. That deal put $21 million in upfront money into Vivus coffers.

Vivus is most well known for its anti-obesity drug Qsymia, which launched in the fall of 2012. Sales of Qsymia have not met with very high expectations, which impacted the equity substantially. With all of the focus on Qsymia, the Stendra news has almost slipped under the radar. This past week IMS Health estimated Qsymia sales to be at just under 11,000, with Symphony health showing that the drug has eclipsed the 11,000 mark for the first time.

With recent management shake-ups at Vivus, and essentially 2 and a half months of flat sales on Qsymia, investors have been seeking a silver lining. Seeing Stendra get a North American deal in place with an almost immediate launch is likely welcomed news.

While I am still hesitant to call a bottom on Vivus, it could be forming up to be the bottom. What investors want to watch for is traction on Qsymia sales, and activity leading into a good roll-out of Stendra, and progress on a Qsymia partner announced by the company. Vivus is currently on its own with Qsymia. Stay tuned.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.