Vivus' ED Drug Continues to Hold Up

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Positive data from a late-stage trial on Vivus Inc.’s (NasdaqGS:VVUS - News) erectile dysfunction (NYSE:ED - News) candidate, avanafil, was recently published in The Journal of Sexual Medicine. The REVIVE (TA-301) study, which was conducted to determine the safety and efficacy of avanafil in ED patients at three doses (50 mg, 100 mg and 200 mg), demonstrated that patients receiving avanafil achieved a significant improvement in erectile function.

Data showed that 64%, 67% and 71% patients who attempted to have intercourse within 15 minutes of taking avanafil were successful after taking 50 mg, 100 mg and 200 mg of the drug, respectively. While only 27% treated with placebo were successful.

We note that in November 2011, another set of positive data on avanafil was presented at the 2011 Sexual Medicine Society of North America Meeting. The TA-314 study, which sought to determine the safety and efficacy of avanafil in patients with type I and type II diabetes, demonstrated that successful intercourse was achieved in some patients within 15 minutes of taking the candidate. Moreover, 83% of the patients who attempted to have intercourse within 15 minutes of taking avanafil were successful.

Avanafil is currently under US Food and Drug Administration (:FDA) review. The regulatory body has set a target date of April 29, 2012 for a decision on the drug.

Vivus has a development, licensing and supply agreement with Mitsubishi Pharma Corporation for avanafil. Mitsubishi Pharma is eligible to receive milestone payments on the regulatory filing, approval and sale of the drug in the US and the European Union (NYSEArca:EU - News). Vivus plans to file for the European approval of avanafil in the first quarter of 2012.

ED treatments currently available in the market include Pfizer Inc.’s (NYSE:PFE - News) Viagra and GlaxoSmithKline’s (NYSE:GSK - News) Levitra.

We currently have a Neutral recommendation on Vivus. The stock carries a Zacks #3 Rank (Hold rating) in the short-run. We believe that 2012 will be a transforming year for Vivus, with approval of both avanafil and Qnexa (obesity) expected in April 2012.

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