Company provides business update on
PANCREAZE® acquisition, new
Athyrium debt line and new management
VIVUS, Inc. (NASDAQ:VVUS) (the "Company"), a specialty
pharmaceutical company committed to the development and
commercialization of innovative therapies focusing on treatments
for patients with serious unmet medical needs, today reported
financial results for the quarter ended March 31, 2018 and
provided a business update.
"The acquisition of PANCREAZE®, a cash flow-positive asset, and
the restructuring of a portion of our corporate debt are
significant steps toward our goal of positioning VIVUS as a robust
generator of value for stockholders and patients," said John
Amos, VIVUS' new Chief Executive Officer. "Our new
management team is energized and actively engaged in seeking
additional product acquisitions that will leverage our
commercialization expertise and strengthen our balance sheet.
I am confident that we have the strategy, resources and
employee talent to make VIVUS a leader in the specialty
pharmaceutical market.”
Recent Business Highlights
- VIVUS Management Transition In April
2018, VIVUS announced the addition of John Amos as its
new Chief Executive Officer and Board Member. The Company
also announced the addition of Kenneth Suh as President and Chief
Executive Officer of Willow Biopharma Inc. (now a wholly-owned
subsidiary of VIVUS, Inc.), and Scott Oehrlein as the Company’s
Chief Operations Officer to the senior leadership team. These
three individuals each have strong track records of building
successful cash-flow positive businesses through product
acquisition and enhanced commercialization strategies and
efficiencies. This leadership transition is a critical first
step in executing VIVUS’ strategy to expand and optimize the
management of the Company’s portfolio of commercial products and
accomplishes one of the Company’s key goals outlined for
2018.
- VIVUS to Acquire PANCREAZE to Expand its Commercial
Product PortfolioIn May 2018, VIVUS announced that it had
entered into an agreement with Janssen Pharmaceuticals, Inc., under
which VIVUS will acquire all product rights for PANCREAZE®
(pancrelipase) Delayed-Release Capsules in the United States
and Canada. The transaction is expected to close,
subject to governmental anti-trust reviews and other customary
closing conditions, by the end of the second quarter of
2018.Approved in 2010, PANCREAZE is a pancreatic enzyme preparation
consisting of pancrelipase, an extract derived from porcine
pancreatic glands, as well as other enzyme classes, including
porcine-derived lipases, proteases and amylases. The
pancreatic enzymes in PANCREAZE act like digestive enzymes
physiologically secreted by the pancreas. PANCREAZE is specifically
indicated for the treatment of exocrine pancreatic insufficiency
due to cystic fibrosis or other conditions.
- VIVUS Enters into an Agreement to Restructure a Portion
of its Convertible Notes and Establish a New Credit Line with
AthyriumVIVUS entered into an agreement for a new $120
million Senior Secured Note with investment funds managed by
Athyrium Capital Management, LP (“Athyrium”). The agreement
provides for $110 million of notes to be issued by VIVUS concurrent
with the closing of the PANCREAZE acquisition and subject to the
satisfaction of other customary closing conditions. The
remaining $10 million will be available for issuance upon meeting
certain financial thresholds or repurchasing the Company’s
Convertible Notes at certain prices. Payments on the Senior
Secured Notes will bear interest at 10.375% and will be
interest-only for the first three years. Concurrently with
the Senior Secured Notes issuance, VIVUS will repurchase Athyrium’s
Convertible Notes, due in May 2020 with a face value of $60
million, at a discount to par.
2018 Strategic Objectives
- Expand the Company's growing commercial portfolio through the
acquisition of additional cash-flow positive specialty
pharmaceutical products that leverage the Company’s demonstrated
commercialization capabilities.
- Continue monetizing VIVUS' legacy assets through
innovative sales and marketing strategies and potential expansion
into additional markets.
- Further the development of tacrolimus, a potentially
first-in-class therapy for the treatment of pulmonary arterial
hypertension (PAH). VIVUS expects to file an Investigational
New Drug Application (IND) with the U.S. Food and Drug
Administration for tacrolimus in the treatment of PAH and complete
the development of its proprietary formulation of tacrolimus.
Financial Results
Net loss for the first quarter of 2018 was $10.7 million,
as compared to a net loss of $1.1 million in the first
quarter of 2017. Cash, cash equivalents and
available-for-sale securities were $209.1
million at March 31, 2018.
Revenue consisted of the following:
|
Three Months Ended |
|
|
March 31, |
|
|
2018 |
|
2017 |
|
Qsymia product revenue,
net |
$ |
9,632 |
|
$ |
17,620 |
(1) |
|
License and milestone
revenue |
|
-- |
|
|
5,000 |
|
STENDRA/SPEDRA supply
revenue |
|
1,683 |
|
|
3,812 |
|
STENDRA/SPEDRA royalty
revenue
|
|
585 |
|
|
580 |
|
Total
revenue |
$ |
11,900 |
|
$ |
27,012 |
|
(1)
Includes one-time accounting adjustment of $7.3 million
Net Qsymia product revenue decreased to $9.6 million in the
first quarter of 2018 as compared to $10.3 million in the first
quarter of 2017, excluding the one-time change in accounting
adjustment of $7.3 million in the first quarter of 2017 for the
change to the “sell-in” revenue recognition methodology. In
the first quarters of 2018 and 2017, VIVUS shipped
approximately 83,000 and 89,000 units of Qsymia to the wholesalers,
respectively. Approximately 92,000 and 102,000 Qsymia
prescriptions were dispensed in the first quarters of 2018 and
2017, respectively.
Total cost of goods sold was $2.7
million and $6.2 million in the first quarters of
2018 and 2017, respectively. The decrease was primarily a result of
lower Qsymia product revenue and the lower STENDRA/SPEDRA supply
revenue as described above.
Research and development expense was $1.4
million and $2.2 million in the first quarters of
2018 and 2017, respectively. In 2017, research and
development expenses were impacted by the payment of license fees
to Selten for the acquisition of tacrolimus. Excluding these
license fees, development costs increased due to the ongoing
development of tacrolimus.
General and administrative expense was $5.8
million and $6.0 million for the first quarters of
2018 and 2017, respectively. Selling and marketing expense for the
commercialization of Qsymia totaled $4.3
million and $5.5 million in the first quarters of
2018 and 2017, respectively. Sales and marketing
expense in 2017 included a $0.7 million one-time adjustment related
to the one-time accounting adjustment.
Conference Call Details
As previously announced, VIVUS will hold a conference
call and an audio webcast to provide a business update and to
discuss the 2018 first quarter financial results today, May 8,
2018, beginning at 4:30PM Eastern Time. Investors may listen
to this call by dialing toll-free 1-877-359-2916 in
the U.S. and 1-224-357-2386 from outside
the U.S. The audience passcode is 1366646. A
webcast replay will be available for 30 days and may be accessed
at http://ir.vivus.com/events-and-presentations.
About Qsymia
Qsymia is approved in the U.S. and is indicated as an adjunct to
a reduced-calorie diet and increased physical activity for chronic
weight management in adults with an initial body mass index (BMI)
of 30 kg/m2 or greater (obese) or 27 kg/m2 or greater
(overweight) in the presence of at least one weight-related medical
condition such as high blood pressure, type 2 diabetes, or high
cholesterol.
The effect of Qsymia on cardiovascular morbidity and mortality
has not been established. The safety and effectiveness of
Qsymia in combination with other products intended for weight loss,
including prescription and over-the-counter drugs, and herbal
preparations, have not been established.
For more information about Qsymia, please
visit www.Qsymia.com.
Important Safety Information for Qsymia
Qsymia® (phentermine and topiramate extended-release)
capsules CIV is contraindicated in pregnancy; in patients with
glaucoma; in hyperthyroidism; in patients receiving treatment or
within 14 days following treatment with monoamine oxidase
inhibitors; or in patients with hypersensitivity to sympathomimetic
amines, topiramate, or any of the inactive ingredients in
Qsymia.
Qsymia can cause fetal harm. Females of reproductive potential
should have a negative pregnancy test before treatment and monthly
thereafter and use effective contraception consistently during
Qsymia therapy. If a patient becomes pregnant while taking
Qsymia, treatment should be discontinued immediately, and the
patient should be informed of the potential hazard to the
fetus.
The most commonly observed side effects in controlled clinical
studies, 5% or greater and at least 1.5 times placebo, include
paraesthesia, dizziness, dysgeusia, insomnia, constipation, and dry
mouth.
About Avanafil
STENDRA® (avanafil) is approved in the U.S. by
the FDA for the treatment of erectile dysfunction.
Metuchen Pharmaceuticals LLC has exclusive marketing rights to
STENDRA in the U.S., Canada, South
America and India.
STENDRA is available through retail and mail order
pharmacies.
SPEDRA™, the trade name for avanafil in the EU, is approved by
the EMA for the treatment of erectile dysfunction in the EU.
VIVUS has granted an exclusive license to the Menarini
Group through its subsidiary Berlin-Chemie AG to
commercialize and promote SPEDRA for the treatment of erectile
dysfunction in over 40 European countries plus Australia and
New Zealand.
Avanafil is licensed from Mitsubishi Tanabe Pharma
Corporation (MTPC). VIVUS owns worldwide
development and commercial rights to avanafil for the treatment of
sexual dysfunction, with the exception of certain Asian-Pacific Rim
countries. VIVUS is in discussions with other parties
for the commercialization rights to its remaining territories.
For more information about STENDRA, please
visit www.STENDRA.com.
Important Safety Information for STENDRA
STENDRA® (avanafil) is prescribed to treat erectile
dysfunction (ED).
Do not take STENDRA if you take nitrates, often prescribed for
chest pain, as this may cause a sudden, unsafe drop in blood
pressure.
Discuss your general health status with your healthcare provider
to ensure that you are healthy enough to engage in sexual activity.
If you experience chest pain, nausea, or any other
discomforts during sex, seek immediate medical help.
STENDRA may affect the way other medicines work. Tell your
healthcare provider if you take any of the following; medicines
called HIV protease inhibitors, such as ritonavir (Norvir®),
indinavir (Crixivan®), saquinavir (Fortavase® or Invirase®) or
atazanavir (Reyataz®); some types of oral antifungal medicines,
such as ketoconazole (Nizoral®), and itraconazole (Sporanox®); or
some types of antibiotics, such as clarithromycin (Biaxin®),
telithromycin (Ketek®), or erythromycin.
In the rare event of an erection lasting more than 4 hours, seek
immediate medical help to avoid long-term injury.
In rare instances, men taking PDE5 inhibitors (oral erectile
dysfunction medicines, including STENDRA) reported a sudden
decrease or loss of vision. It is not possible to determine
whether these events are related directly to these medicines or to
other factors. If you experience sudden decrease or loss of
vision, stop taking PDE5 inhibitors, including STENDRA, and call a
doctor right away.
Sudden decrease or loss of hearing has been rarely reported in
people taking PDE5 inhibitors, including STENDRA. It is not
possible to determine whether these events are related directly to
the PDE5 inhibitors or to other factors. If you experience
sudden decrease or loss of hearing, stop taking STENDRA and contact
a doctor right away. If you have prostate problems or high
blood pressure for which you take medicines called alpha blockers
or other anti-hypertensives, your doctor may start you on a lower
dose of STENDRA.
Drinking too much alcohol when taking STENDRA may lead to
headache, dizziness, and lower blood pressure.
STENDRA in combination with other treatments for ED is not
recommended.
STENDRA does not protect against sexually transmitted diseases,
including HIV.
The most common side effects of STENDRA are headache, flushing,
runny nose and congestion.
Please see full patient prescribing information for STENDRA (50
mg, 100 mg, 200 mg) tablets.
About VIVUS
VIVUS is a specialty pharmaceutical company committed to
the development and commercialization of innovative therapies that
focus on advancing treatments for patients with serious unmet
medical needs. For more information about the Company, please
visit www.vivus.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking
within the meaning of the Private Securities Litigation Reform Act
of 1995 and are subject to risks, uncertainties and other factors,
including risks and uncertainties related to potential change in
our business strategy to enhance long-term stockholder value; risks
and uncertainties related to the integration and continued
operations of Willow and our ability to achieve expected synergies;
risks and uncertainties related to diversion of our resources and
difficulty in retaining critical employees of the acquired
business; risks and uncertainties related to our ability to address
or potentially reduce our outstanding balance of the convertible
notes due in 2020; risks and uncertainties related to our expected
future revenues, operations and expenditures; risks and
uncertainties related to our ability to identify and acquire
development and cash flow generating assets; risks and
uncertainties related to our agreement with Janssen
Pharmaceuticals, Inc. for the acquisition of all product rights for
PANCREAZE in the U.S. and Canada, including that the closing of the
agreement is subject to governmental reviews and other closing
conditions; risks and uncertainties related to our
commercialization of PANCREAZE as a new product and our recently
changed management team initiating the commercialization of
PANCREAZE; risks and uncertainties related to our, or our
partner's, ability to successfully commercialize Qsymia; risks and
uncertainties related to our ability to successfully develop or
acquire a proprietary formulation of tacrolimus as a precursor to
the clinical development process; risks and uncertainties related
to our ability to identify, acquire and develop new product
pipeline candidates; risks and uncertainties related to our ability
to develop a proprietary formulation and to demonstrate through
clinical testing the quality, safety, and efficacy of our current
or future investigational drug candidates; risks and uncertainties
related to the timing, strategy, tactics and success of the
commercialization of STENDRA (avanafil) by our sublicensees; risks
and uncertainties related to our ability to successfully complete
on acceptable terms, and on a timely basis, avanafil partnering
discussions for territories under our license with MTPC in which we
do not have a commercial collaboration; risks and uncertainties
related to the failure to obtain FDA or foreign authority
clearances or approvals and noncompliance with FDA or
foreign authority regulations; and risks and uncertainties related
to the impact, if any, of changes to our Board of Directors and
senior management team. These risks and uncertainties could cause
actual results to differ materially from those referred to in these
forward-looking statements. The reader is cautioned not to rely on
these forward-looking statements. Investors should read the risk
factors set forth in VIVUS’ Form 10-K for the year ended December
31, 2017 as filed on March 14, 2018, and as amended by the Form
10-K/A filed on April 26, 2018, and periodic reports filed with the
Securities and Exchange Commission. VIVUS does not undertake
an obligation to update or revise any forward-looking
statements.
VIVUS,
Inc. |
Investor
Relations: Lazar Partners |
Mark Oki |
David Carey |
Chief Financial
Officer |
Managing Director |
oki@vivus.com |
dcarey@lazarpartners.com |
650-934-5200 |
212-867-1768 |
|
VIVUS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share
data)(Unaudited) |
|
|
|
Three Months Ended |
|
March 31, |
|
2018 |
|
2017 |
Revenue: |
|
|
|
|
|
Net
product revenue |
$ |
9,632 |
|
|
$ |
17,620 |
|
License
and milestone revenue |
|
-- |
|
|
|
5,000 |
|
Supply
revenue |
|
1,683 |
|
|
|
3,812 |
|
Royalty
revenue |
|
585 |
|
|
|
580 |
|
Total
revenue |
|
11,900 |
|
|
|
27,012 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Cost of
goods sold |
|
2,721 |
|
|
|
6,167 |
|
Research
and development |
|
1,403 |
|
|
|
2,180 |
|
Selling,
general and administrative |
|
10,068 |
|
|
|
11,431 |
|
Total
operating expenses |
|
14,192 |
|
|
|
19,778 |
|
|
|
|
|
|
|
(Loss) income from
operations |
|
(2,292 |
) |
|
|
7,237 |
|
|
|
|
|
|
|
Interest
expense and other expense, net |
|
8,349 |
|
|
|
8,302 |
|
(Loss) income before
income taxes |
|
(10,641 |
) |
|
|
(1,068 |
) |
Provision (benefit) for
income taxes |
|
12 |
|
|
|
(12 |
) |
Net
(loss) income |
$ |
(10,653 |
) |
|
$ |
(1,056 |
) |
|
|
|
|
|
|
Basic net (loss) income
per share |
$ |
(0.10 |
) |
|
$ |
(0.01 |
) |
Diluted net (loss)
income per share |
$ |
(0.10 |
) |
|
$ |
(0.01 |
) |
Shares used in per
share computation: |
|
|
|
|
|
Basic |
|
106,014 |
|
|
|
105,479 |
|
Diluted |
|
106,014 |
|
|
|
105,479 |
|
|
VIVUS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(In
thousands) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2018 |
|
2017* |
ASSETS |
|
|
(Unaudited) |
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
76,805 |
|
|
$ |
66,392 |
|
Available-for-sale securities |
|
|
132,320 |
|
|
|
159,943 |
|
Accounts
receivable, net |
|
|
11,291 |
|
|
|
12,187 |
|
Inventories |
|
|
21,006 |
|
|
|
17,712 |
|
Prepaid
expenses and other assets |
|
|
6,447 |
|
|
|
7,178 |
|
Total
current assets |
|
|
247,869 |
|
|
|
263,412 |
|
Property and equipment,
net |
|
|
510 |
|
|
|
542 |
|
Non-current assets |
|
|
924 |
|
|
|
1,014 |
|
Total
assets |
|
$ |
249,303 |
|
|
$ |
264,968 |
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
4,786 |
|
|
$ |
10,072 |
|
Accrued
and other liabilities |
|
|
20,788 |
|
|
|
21,475 |
|
Deferred
revenue |
|
|
2,179 |
|
|
|
2,075 |
|
Current
portion of long-term debt |
|
|
836 |
|
|
|
5,147 |
|
Total
current liabilities |
|
|
28,589 |
|
|
|
38,769 |
|
Long-term
debt, net of current portion |
|
|
235,671 |
|
|
|
230,536 |
|
Deferred
revenue, net of current portion |
|
|
4,279 |
|
|
|
4,674 |
|
Non-current accrued and other liabilities |
|
|
307 |
|
|
|
327 |
|
Total
liabilities |
|
|
268,846 |
|
|
|
274,306 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’
deficit: |
|
|
|
|
|
|
Common
stock and additional paid-in capital |
|
|
835,760 |
|
|
|
834,835 |
|
Accumulated other comprehensive loss |
|
|
(1,085 |
) |
|
|
(608 |
) |
Accumulated deficit |
|
|
(854,218 |
) |
|
|
(843,565 |
) |
Total
stockholders’ deficit |
|
|
(19,543 |
) |
|
|
(9,338 |
) |
Total
liabilities and stockholders’ deficit |
|
$ |
249,303 |
|
|
$ |
264,968 |
|
_____________________________________________________________________ |
|
* The Condensed Consolidated Balance Sheets have been derived
from the Company's audited financial statements at that date, as
adjusted. |
|
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