A Reasoned Case For Avanafil Approval

| About: Vivus, Inc. (VVUS)

In a previous article, a reasoned case was presented for the approval of VIVUS' (VVUS) Qnexa. In this second article, I explain why VIVUS's Avanafil may receive FDA approval. Avanafil's FDA action date is 29 April 2012. I'd be ready for a decision come 23 April. Surely by 30 April, a Monday of all days, may be the day of reckoning. Upfront, I rate the drug candidate from three angles:

  1. Avanafil's Efficacy = "above average"
  2. Avanafil's Safety = "above average"
  3. Breath of phase 3 data = "average"

I view Avanafil's approval possibility as 'better than average'.

I. Risk Assessment

Setting things in context, I argue: (1) the FDA's decision will reflect integrity, (2) the FDA's decision will be focused on Avanafil, (3) political games won't influence the FDA's decision, and (4) most stock chat boards offer little due-diligence or help discerning the issues.

I remind readers, this article represents my opinion. My opinion may be wrong. Investors always buy and/or sell at their own risk.

II. Avanafil Efficacy

Regarding efficacy, I view Avanafil's as 'above average'. Observe that VIVUS represents in its own press release no less than five data-backed efficacy reasons (I use this report because it is the most recent information out of VIVUS):

  • "All doses tested , 50 mg, 100 mg, and 200 mg, met each of the co-primary efficacy endpoints
  • Erections sufficient for penetration (SEP2) were observed in 77% and 63% of avanafil patients at the 200 mg dose, as compared to 54% and 42% of placebo patients in the REVIVE and REVIVE-Diabetes studies, respectively
  • Successful intercourse (SEP3) was achieved in 57% and 40% of avanafil patients at the 200 mg dose, as compared to 27% and 20% of placebo patients in the REVIVE and REVIVE-Diabetes studies, respectively
  • Significant improvement in erectile function as measured by IIEF-EF domain score was observed for all doses in avanafil-treated patients
  • Across all the phase 3 studies, successful intercourse (SEP3) was observed in some avanafil-treated patients as early as 15 minutes after dosing"

First, that all doses tested met the co-primary efficacy endpoints is unusual especially for the lowest dosage. Second, the efficacy endpoints for the 200 mg dose out-performed the placebo by 23% and 21% - that is more than double than the 10% FDA line-in-the-sand. Third, successful intercourse out-performed the placebo effect by 30% and 20% in the 200 mg dosage. Fourth, erectile function was improved at all dosage levels. Fifth, "some" Avanail patients engaged in successful intercourse only 15 minutes after dosing - from what I read that is a 50% improvement over currently approved FDA medicaments.

Therefore, for scientific reasons, I view Avanafil's efficacy as 'above average' - illustratively, I envision 8 out of 10 panelists voting "Yes" based on efficacy-alone.

III. Avanafil Safety

Observe the added advantage of knowing Avanafil is already approved (21 October 2011) in South Korea under the name "Zepeed" by JW Choongwae. Likewise note: Pfizer's (PFE) Viagra is under heavy pressure given Avanafil's efficacy and response time. Now what about its safety profile?

Why I view Avanafil's safety profile as 'above average' is for the following reason: I observe a list of side effects that imply no FDA show-stoppers or additional clinical studies needed for approval:

  • "The most common side effects were headache, flushing, nasopharyngitis and nasal congestion
  • There were no drug-related serious adverse events reported in the studies" (Ibid).

What I see here is a medicament with a relatively clean slate. Therefore, I can only conclude that Avanafil's safety profile is 'above average'.

IV. Avanafil Breath of Data

The old adage, 'the more, the merrier' applies here. The more data any biotech firm has to present to the FDA, the better. My 'average' rating however accounts for a Phase 3 patient figure above the one thousand mark. I would reserve two thousand patients as 'above average' or the lower fifteen hundred mark as 'better than average'.

In favor of Avanafil is that it was tested in 1,350 patients in the various Phase 3 studies. Observe that VIVUS conducted multiple phase 3 studies designated as: (1) REVIVE - 646 ,males, (2) REVIVE-Diabetes - 390 males, and (3) REVIVE-radical prostatectomy - 298 males = 1,350 total. That should be enough data to satisfy 6 out of 10 FDA decision-makers. The company adds: "... the results from the year-long safety study, TA-314, which included 712 continuation patients from the REVIVE and REVIVE-Diabetes studies" (Ibid).

V. Quick Resources

For investors needing quick information from VIVUS on Avanafil:

Earlier events are available at the company website.

VII. Conclusion

My only real caution rests with the breath of Avanafil's data pool, though the efficacy and safety data are 'above average'. Illustratively I suggest 7 out of 10 investigators will vote in favor of Avanafil's approval with is why I state that is 'better than average'. If no other cautionary flags are raised during the review, then I would suggest 8 out of 10 will vote in Avanafil's favor as an 'above average' scenario.

VIII. Speculation Addendum

This is purse speculation on my part, but I wonder how Pfizer can sit back knowing that Avanafil, upon approval, is going to directly challenge Viagra. Pfizer is sitting on billions in cash. Or another player like Sanofi (SNY) may step into this mix. I'll admit that I'm somewhat surprised that a buy-out has not already been announced. But who? When? It's all speculation. It may never happen. If a buy-out doesn't happen, and Avafil and Qnexa are both approved, I envision the share price surpassing $50/share on heavy trading.

Disclosure: I am long VVUS.

Additional disclosure: Investors buy and/or sell at their risk. "Long" means until I decide to sell for my own personal reasons. As a private investor, I reserve my right to buy and/or sell at any time. I submit articles to SA as a freelance writer.