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Update on VIVUS' Stendra

Zacks Equity Research

Apart from obesity drug Qsymia, VIVUS, Inc.’s (VVUS) portfolio consists of another approved product, Stendra (trade name: Spedra in Europe), for erectile dysfunction (ED). Stendra, a phosphodiesterase type 5 (PDE5) inhibitor, received marketing approval in the U.S. in Apr 2012 and in the EU in Jun 2013.

VIVUS has entered into a license and commercialization agreement with Menarini. As per the terms of the agreement, Menarini will get the rights to Stendra in more than 40 European countries, apart from Australia and New Zealand.

VIVUS has entered into an agreement for Stendra with Auxilium Pharmaceuticals, Inc. (AUXL).

As per the terms of the agreement, Auxilium will get the rights to Stendra in the U.S. and Canada. In exchange VIVUS will get an upfront payment, milestone and other payments totaling approximately $300 million, depending upon certain pre-specified criteria.

VIVUS and Auxilium also entered into a supply agreement for Stendra, according to which VIVUS will supply the product to the latter.

The partnership on Stendra will not only boost VIVUS’ balance sheet but also go a long way in removing uncertainties related to the drug’s launch in the U.S. scheduled later this year.

In Jul 2013, VIVUS had announced encouraging data from a multi-center, placebo-controlled study (TA-501) evaluating the efficacy of Stendra in men suffering from ED.

The study enrolled 440 patients with mild-to-severe ED with or without diabetes. Data from the study revealed that on an average Stendra was effective after 10 minutes and 12 minutes of taking the 200 mg and 100 mg formulation of the drug, respectively.

According to the company, ED therapies recorded combined sales of over $2.9 billion in 2012 in the U.S. The ED market is expected to grow further in the coming years.

Currently approved PDE5 inhibitors including Viagra and Cialis are recommended for ingestion one to two hours prior to sexual activity or daily. We believe Stendra’s fast action could help the drug gain share.

VIVUS currently carries a Zacks Rank #3 (Hold). Currently, companies like Roche (RHHBY) and Isis Pharmaceuticals, Inc. (ISIS) look more attractive with a Zacks Rank #1 (Strong Buy).

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