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VIVUS (VVUS) Q3 Loss Narrower Than Expected, Revenues Up Y/Y

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VIVUS (VVUS) Q3 Loss Narrower Than Expected, Revenues Up Y/Y

VIVUS (VVUS) reports narrower-than-expected loss in the third quarter. Sales increase year over year.

VIVUS Inc. VVUS reported a loss of 87 cents per share for the third quarter of 2018, wider than a loss of 57 cents in the year-ago period but narrower than the Zacks Consensus Estimate of $1.10. Quarterly revenues increased 19.1% from the year-ago period to $18.1 million mainly due to contribution of sales from recently acquired drug, Pancreaze.

So far this year, VIVUS shares have decreased 32.1% compared with the industry’s decline of 16.2%.

Quarter in Detail

Product revenues during the quarter rose 66.3% to $16.5 million.

The company’s weight management drug Qsymia generated net product sales of $9.7 million, down 1.8% from the year-ago period due to decrease in shipments of the drug.

Pancreaze brought in sales of $6.7 million in its first full quarter of sales. VIVUS acquired the exocrine pancreatic insufficiency drug in June this year from Janssen, a subsidiary of Johnson & Johnson JNJ.

However, supply revenues from Stendra/Spedra were significantly down to $0.47 million in this quarter compared with $2.1 million in the year-ago period. Royalty revenues from sales of Pancreaze in Canada and Spedra in Europe were $1.1 million, up 73.5%.

Selling, general and administrative (SG&A) expense was $8.5 million, a 0.8% increase year over year. The increase was due to higher marketing and promotional activities for Qsymia, which was mostly offset by cost control initiatives.

Research and development expense increased 133% to $2.1 million in the reported quarter due to increased development efforts for VI-0106 for the treatment of pulmonary arterial hypertension.

Our Take

Performance of VIVUS’ obesity drug, Qsymia, was poor this quarter with its sales declining year over year as well as sequentially in the third quarter. The drug’s sales continued to be impacted by seasonality. However, the company remains focused on efforts to promote Qsymia, and cost cutting initiatives. The acquisition of Pancreaze boosted product revenues significantly. Moreover, retirement of its convertible debt during the quarter will reduce interest payments.

VIVUS stated that it anticipates higher operating expenses going forward due to post marketing requirements, integration and commercialization efforts for Pancreaze.

Although the acquisition of more cash-flow positive drugs like Pancreaze is likely to boost sales, it will also increase operating expenses.

VIVUS, Inc. Price, Consensus and EPS Surprise


VIVUS, Inc. Price, Consensus and EPS Surprise | VIVUS, Inc. Quote

Zacks Rank & Stocks to Consider

VIVUS currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the biotech sector are CRISPR Therapeutics CRSP and Vertex Pharmaceuticals Inc. VRTX. While CRISPR Therapeutics sports a Zacks Rank #1 (Strong Buy), Vertex carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CRISPR Therapeutics’ estimates have narrowed from loss of $2.95 to $2.92 for 2018 over the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters, delivering average beat of 19.50%. Share price of the company has increased 39.6% year to date.

Vertex’s earnings per share estimates have moved up from $3.73 to $3.83 for 2018 over the past 30 days. The company delivered a positive earnings surprise in all the trailing four quarters, delivering average beat of 18.94%. The company’s shares have rallied 17% year to date.

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