Piper Jaffray Downgrades VIVUS Inc to Underweight 4/3/14
n a report published today, Piper Jaffray downgraded shares of VIVUS Inc (VVUS) to Underweight from Neutral and lowered the price target to $3.00 from $8.00
“Although we continue to believe the U.S. anti-obesity market outlook is improving due to updated professional guidelines and accumulating evidence for long-term pharmacoeconomic benefit from treating obesity, these macro-dynamics have not yet appreciably translated to significant gains into Qsymia’s prescription and sales trends, IN OUR VIEW” Piper Jaffray said in a note to clients
“Given that now nearly three full quarters have transpired post proxy battle and management changes, we have grown increasingly wary on the outlook for Qsymia due to: 1) current prescription trends; 2) delays in signing a U.S. marketing partner; and 3) an expected Contrave launch in 2H14. Based on our updated view of increased execution risk, we are reducing our out-year Qsymia revenue projections and also increasing our discount rate to 20% (from 15%)” it added.
Duncan wrote. He now expects VIVUS to generate revenue of $53M for Qsymia, versus what he said was the street consensus outlook of $92M. Nothing I read says anything about S's or the ED market. The good news is despite all of this the 5.50 bottom is holding...so far. VVUS market cap grew from 616M to 638 and institutional ownership increased 10% in a short time. Stock was set to pop yesterday but red volume at close sent a signal. This move is all about liquidity. The chocolate math put enterprise value at 6.18 (close) new fidelity estimates value current assets at 4.91 or 508.2M Now we know this is not what stocks trade on. Future earnings are a mystery here as analysts and the village idiot only use the rear view mirror. BTW no bottom in a stock like this one goes untested, so far so good and the bad news is already built into the VVUS story. Good news?