Vivus gets ED drug approval, spurring fresh talk of a deal

Posted under Blog, Companies, Diagnostics, erectile dysfunction, FDA approval, Funding, Medical Devices, Medical Supply, Pharmaceuticals, Qnexa, Regulatory, Startups, Stendra, Universities, Videos, Vivus by john

The FDA issued word this afternoon that it had stamped its OK on Stendra (avanafil), an erectile dysfunction treatment designed to spur a quicker response for men. The drug will enter a crowded field of rival and better known treatments in a mass market, leaving some analysts to suggest that the Mountain View, CA-based biotech ($VVUS) would be better off making a deal on it as soon as possible with a Big Pharma company.

Like Viagra and Cialis, the treatment works by increasing blood flow. Its marketing edge is getting results for most men in only 15 minutes. But shares of Vivus barely budged on the unsurprising news, with investors less than enthusiastic about Stendra's short-term prospects.

"Does anyone really need another ED drug?" asks Simos Simeonidis, an analyst at Cowen, in a note to investors. "Probably not, but given the large market opportunity and the potentially differentiating faster onset of action, we believe that in the hands of big pharma Stendra is probably worth around $300 million. We remind investors that management's intent is to outlicense/divest Stendra."

Vivus faces a much more important July 17 deadline for an FDA response on Qnexa, which has a solid shot at becoming the first new obesity drug to get an OK in more than a decade. Once again, Vivus is looking at a drug aimed at a mass market; not the kind of field a small company can play in. If it does get an approval, analysts like Simeonidis wonder how they could ever market it successfully. And that makes the ideal outcome here a buyout, giving a Big Pharma company a chance to scoop up the entire company and its products.

Adds Simeonidis: "We believe that Qnexa is a drug with tangible blockbuster potential that should be in the hands of big pharma; with all its problems and issues, this is the one thing big pharma has always done better than anyone: get primary docs to prescribe its products. We believe that Vivus management, which is both competent and sophisticated, should pursue a sale of the company, and they're probably in the process of doing so." 

- here's the company's release
- here's the story from The Wall Street Journal

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Vivus shares slide as FDA delays decision on Qnexa

Posted under Arena Pharmaceuticals, Blog, Companies, Diagnostics, Funding, lorcaserin, Medical Devices, Medical Supply, obesity, Pharmaceuticals, Qnexa, Regulatory, Startups, Universities, Videos, Vivus by john

Shares of Vivus slid more than 6% after the news spread that the FDA would delay a final decision on its closely watched application for the weight drug Qnexa. And in a matter of minutes analysts began to handicap the company's ($VVUS) chances, with several concluding that the delay came with a tantalizing clue about its prospects.

The word from regulators was simple enough. They want the extra time to evaluate Vivus' risk evaluation plan for the drug, one of three still angling for a regulatory win after getting stiff-armed at the FDA. Vivus' chances, though, were increased dramatically in February after a majority of the FDA's expert panel concluded that Qnexa warranted an approval, based on its risks and rewards.

Looking over the Twitter feed, it was clear that there were some who felt the added time positioned Arena's ($ARNA) lorcaserin for a first approval. Others scoffed at the idea. And Cowen's Simos Simeonidis insisted in a note to investors that an OK for Qnexa may already be a done deal.

"Given what happened at the Qnexa panel, we believe the FDA has probably already decided that it will approve Qnexa," observed Simeonidis, "so we don't see any negative read-through from this delay."

After all, wrote TheStreet's Adam Feuerstein, if the FDA had decided to hand out a complete response letter on Qnexa, it would have moved on April 17. A delay has to indicate a likely approval.

We'll find out who's right by the new action date: July 17.

- here's the Reuters story
- read the report from TheStreet

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FDA panel favors added cardio studies for risky weight drugs

Posted under Arena Pharmaceuticals, Blog, Companies, Diagnostics, FDA, Funding, Medical Devices, Medical Supply, obesity, Pharmaceuticals, Qnexa, Regulatory, Startups, Universities, Videos, Vivus by rmcbride

Developing new obesity drugs is notoriously arduous--and it could get tougher. An FDA panel endorsed a plan to have developers of obesity drugs conduct cardiovascular safety studies even when data on the treatments give no indication that heart risks exist. If the FDA takes the panel's advice, developers of obesity drugs could face a longer road to approval.

The panel of experts voted 17-6 in favor of the additional cardiovascular studies, with some citing concerns about long-term use of weight drugs causing heart problems, The New York Times reported. There's still some gray area around whether the additional studies could hamper efforts to gain approvals. The committee seemed open to developers doing the cardio studies after approvals when no signs of heart dangers exist, and companies could capture cardio data in the course of their regular trials.

The vote comes as two developers of weight drugs, Vivus ($VVUS) and Arena Pharmaceuticals ($ARNA), have apps pending approval with the FDA. Vivus is up first with its drug Qnexa, which got the backing of FDA advisers for approval Feb. 22, and it's unclear whether the endorsement for additional heart safety studies will have an impact on the company's chances of gaining the agency's nod to begin sales. Data show the drug increases heart rate, and advisers had already floated the idea of the company doing cardio safety studies after potential approval of the treatment.    

"… given what transpired at the Feb. 22 Qnexa panel and the overall tenor of this panel, we continue to believe that Qnexa will be approved by the April 17" FDA action date on Vivus's app for approval, analysts at Cowen & Company wrote in a note to investors this morning.

JP Morgan biotech analyst Cory Kasimov was also confident that Qnexa would get the FDA's approval stamp.

Still, there's been concern in the biotech community that raising the safety bar on drugs for obesity and diabetes has hurt investment in those fields and added cost and risk to developing new treatments for the conditions that affect many millions of Americans.

- check out The New York Times article
- and the report from Nature

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Vivus basks in limelight of rampant M&A speculation

Posted under Arena Pharmaceuticals, Blog, Companies, Diagnostics, Funding, Medical Devices, Medical Supply, Mergers and Acquisitions, obesity, Orexigen Therapeutics, Pharmaceuticals, Qnexa, Startups, Universities, Videos, Vivus, ZafGen by John Carroll

In yet another sign of just how quickly biotech investors can change their minds, Bloomberg is running a piece today speculating on which Big Pharma company is most likely to swoop in and pay a big premium for Vivus ($VVUS)--which has been flying high on its recent lopsided panel vote favoring approval of the weight drug Qnexa. And the suddenly popular obesity field--which had been relegated to the dust heap of biotech history by a number of observers--has even inspired takeover interest in the fledgling Zafgen, a 2009 Fierce 15 company.

A year ago Vivus was a cautionary tale. Stiff-armed by regulators concerned by safety concerns, it appeared indefinitely stymied alongside rivals Orexigen ($OREX) and Arena ($ARNA). But after managing to resolve most of the panelists' concerns by its willingness to restrict the pill to a carefully defined patient population, Vivus is now the odds-on winner in the race to an approval. And analysts have dollar signs in their eyes as they share gossip on a multibillion-dollar takeover bid by the likes of J&J ($JNJ) or Merck ($MRK).

Rodman & Renshaw has helpfully outlined potential peak sales at a mammoth $5 billion, according to Bloomberg, making Vivus a valuable prize for a Big Pharma company looking to beef up its income. It should be noted that other analysts have been far more cautious in their projections, but few doubt that the drug could be a blockbuster once on the market.

"The FDA has clearly crossed the Rubicon of balancing risk and benefit, understanding that the obesity problem is a pandemic," Rodman's Michael King tells the business news wire, which always enjoys a good M&A rumor story. "There are not a lot of products around in the pharmaceutical industry that address such large market opportunities. Vivus is not going to give this up cheap."

Vivus and its rivals have been criticized for offering up drugs with only marginal impact on body weight. But the same can't be said for Zafgen, which has racked up some inspiring early-stage results for its approach. And CEO Tom Hughes says that he's received overtures from pharma companies interested in buying him out.

Of course, despite the panel vote, some observers still have a nagging feeling that regulators will go ahead and require a cardio safety study ahead of an approval, rather than after. And that would crash the stock price. Vivus isn't waiting to find out, though. Vivus is offering 8.5 million shares while the stock price is high. And several insiders, including the CEO, have been cashing in on their options.

- here's the article from Bloomberg

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