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VIVUS Inc. Message Board

  • greatdayforinvestments greatdayforinvestments Jul 18, 2012 9:28 AM Flag

    Summer Street Recommendation: BUY

    Congrats to Vivus! Like Vivus, Avanir also launched and hired their own sales force! You may also want to look at Avanir! PT $11.00, which is about a 238% increase potential!

    Summer Street
    Avanir Pharmaceuticals (AVNR) June 20, 2012
    Nuedexta Is on a $60MM Run Rate
    Recommendation: BUY
    Price Target: $11.00

    • Management update coincides with excellent Nuedexta prescription growth trends. Since March, month-over-month growth has been 10-12% and week-over-week growth has been 2-3%.
    Gross US sales are annualizing at $60MM 15 months post launch. Recall Q2 gross revenues were $9.2MM and ANVR guided to a 20%
    gross to net going forward.

    • AVNR continues to make progress with reimbursement, right now with managed care. Currently, one-third of patients are tier 2 without restrictions, one-third are tier 3 without restrictions, and one-third are either tier 2 or 3 with restrictions, which usually
    means prior authorization. In addition, AVNR has programs in place to assist patients with co-pays so that no patient is denied treatment.

    • Institutional long-term care is the majority of the business. AVNR has switched some sales representatives from retail to
    institutional. With the new hires there are ~113 representatives. There are ~1.5 million patients in 15,000 US long-term care facilities, and one million patients have underlying neurological conditions that could
    cause PBA. If 10% are treated, the target market is $600MM.

    • PRISM study results were presented in May. The PRISM registry was designed to find the PBA prevalence and its quality of life
    impact on patients with the neurologic conditions of Alzheimer's disease, amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS), Parkinson's disease, stroke, and traumatic brain injury (TBI). At the
    time of the data-cut, 3,647 patients with the six underlying neurologic conditions had enrolled in the PRISM registry. Enrolled patients in the PRISM patient registry completed: 1) the Center for Neurologic Study-
    Lability Scale (CNS-LS), a validated PBA screening tool, 2) quality of life scale, 3) demographic/disease characteristics, and 4) use of concomitant medications. Among the enrolled patients, 37.3% of all participants (n=1,361) had a positive screening score for PBA as
    measured by a CNS-LS≥13. The range of positive screening for PBA was similar across all the disease states (range of 34.7% to 40.0%); the
    prevalence of positive screens was also similar in the MS patient group (38.7%; n=354).

    • The Alzheimer’s/dementia phase II trial will enroll the first patient in September. This trial will enroll ~200 patients and
    should have results by YE:13.

    • AVNR raised $30MM in debt this month. Spending guidance is $90-92MM, with R&D spending of $23-24MM and SG&A spending of
    $67-68MM. AVNR believes it has enough cash through 2013.

    • We reiterate our BUY rating and price target of $11. Our price target of $11 is based on a 25x multiple of our FY15 EPS of $0.63/share
    discounted at 20%.

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