Vivus shares rise on positive avanafil study data

AP News
Posted: Nov 18, 2009 11:55 AM

Shares of Vivus Inc. gained ground Wednesday after the company said its erectile dysfunction drug candidate avanafil reached its key goal in a late-stage clinical study.

The stock rose 32 cents, or 3.7 percent, to $8.89 in afternoon trading. Shares have traded between $2.72 and $12.88 over the last 52 weeks.

Early Wednesday, the Mountain View, Calif., company said men who took avanafil experienced a greater improvement in their erectile dysfunction symptoms than patients who took a placebo. The results are from the first of four late-stage studies on the drug candidate. The company plans to ask for Food and Drug Administration approval in late 2010 or early 2011.

"The results look very promising with strong efficacy results and side effects that look as good as or better than the other erectile dysfunction treatments on the market," said Leerink Swann Research analyst Steve Yoo, in a note to investors.

He expects additional studies on the drug candidate to produce positive results, clearing the way for FDA approval. Those include a safety study, a study on men with diabetes and another on men who had their prostate glands removed.

Still, he said the competitive landscape could pose a challenge for Vivus.

The market for erectile dysfunction drugs is already crowded, with several drugs jostling for a larger share of the market. Pfizer Inc.'s Viagra, Eli Lilly & Co.'s Cialis and Bayer's Levitra already have a foothold in the market, potentially making the entrance of new products difficult. And, Yoo points out, there is a risk that there could be competition from generic Viagra in 2012, potentially limiting revenue from competing branded products.

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"Vivus intends to find a partner to sell Avanafil," Yoo said. "This is the appropriate strategy, given the large primary care sales force and the extensive direct-to-consumer marketing required to generate sales."

Yoo said he believes Vivus' best chance for a value driver is its developing obesity treatment Qnexa. Still, that drug candidate is part of an expanding market for weight-loss drugs. It could face tough competition from Arena Pharmaceuticals Inc.'s lorcaserin and Orexigen Therapeutics Inc.'s Contrave.