Viva Vivus (VVUS)
Vivus (VVUS) took at 25% one-day jump recently after good
news about one of its treatments.
The interim results from the drug, Qnexa, were released in
an abstract to be presented at the American Diabetes Association
conference next month. Vivus is pursuing Qnexa in a lead indication
for obesity.
How good was the news? Rodman & Renshaw has an $11 price
target on the stock and RBC Capital Markets has an $8 target. The
shares are at $7.32, their 52-week high. And, they could move up
more.
Vivus recently filed for a $150 million stock offering. That is a lot
of potential dilution, but the firm has the financials to back up
asking for new capital.
Total revenue for the first quarter of 2008 was $22.7 million, as compared
to $1.7 million for the first quarter of 2007. The increase in revenue over the first
quarter last year was primarily due to the recognition of $20.9 million in
deferred license revenue earned from the sale in 2007 of Evamist to K-V
Pharmaceutical Company. Not the perfect way to earn on-going revenue,
but still very impressive.
Vivus lost $7 million in the quarter, but has $170 million in cash and
short-term securities. That makes the firm a rare biotech mix of real
progress against R&D milestones and a strong enough balance sheet
to stay in the game.
Douglas A. McIntyre