Vivus shares dive following 3rd-quarter report

NEW YORK (AP) — Shares of Vivus Inc. fell sharply Wednesday after the drug developer reported a third-quarter loss, though analysts maintained their focus on the company's potential obesity treatment Qnexa.

The stock shed 90 cents, or 11.2 percent, to $7.15 in afternoon trading. Shares have traded between $2.72 and $12.88 over the last 52 weeks.

On Tuesday, Vivus announced a quarterly loss of $21.1 million, or 30 cents per share, compared with profit of $266,000, or less than a penny per share, during the same period a year prior. Revenue plunged to $4.4 million from $25.5 million recorded in the 2008 quarter, when the company reported deferred revenue from the sale of its spray-on hot flash treatment Evamist.

Analysts polled by Thomson Reuters expected a loss of 31 cents per share on revenue of $5.3 million.

During the latest quarter, sales of the erectile dysfunction product Muse fell 2 percent to $4.3 million.

The company said it remains on track to ask for Food and Drug Administration approval of Qnexa by the end of 2009. The development of Qnexa is part of a surge in obesity treatment development from the biotechnology sector. If approved, Qnexa would likely compete with other treatments including Arena Pharmaceuticals Inc.'s lorcaserin and Orexigen Therapeutics Inc.'s Contrave.

Vivus had cash, cash equivalents and available-for-sale securities of $226.9 million as of Sept. 30.

"Vivus is developing what we believe to be the best-in-class agent in an exciting new category of agents for the treatment of obesity," said Merriman Curhan Ford analyst Michael G. King Jr. in a note to investors. "A new era of pharmacologic therapy for obesity has arrived, and the category possesses blockbuster potential."

He reaffirmed a "Buy" rating on the stock.

Meanwhile, JMP Securities analyst Jason N. Butler reaffirmed a "Market Perform" rating Vivus, saying the most important financial metric to come out of the third-quarter report is the company's cash, which he called "more than sufficient" to fund operations.