Why VIVUS Inc. Shares Spiked Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of VIVUS (NASDAQ: VVUS  ) , a biopharmaceutical company developing therapies to combat obesity, sleep apnea, diabetes, and sexual dysfunction, spiked higher by as much as 16% following a 13-D filing with the Securities and Exchange Commission from little known Aspen Investment which announced it may make a bid to purchase VIVUS.

So what: According to the 13-D filing, Aspen Investment disclosed a 9.65% stake in VIVUS and announced that it may make a bid to take VIVUS private for a price of $640 million, or what amounts to about $6.19 per share, a 33% premium to yesterday's closing price. As Aspen Investment's 13-D goes on to note, it's under no obligation to actually offer a bid for VIVUS, but assuming it can secure working capital and debt from investment institutions it expects to submit its offer to purchase VIVUS by June 13. Based on commentary from Bloomberg, VIVUS has no comment on the possibility of an offer.

Now what: While this upside is a welcome surprise for investors who've been slammed over the past year on weaker-than-expected sales of weight control management drug Qsymia, I am completely lost as to why Aspen would pay as much as a 33% premium for a company whose losses really aren't shrinking. Qsymia has thus far been a complete dud as an anti-obesity drug, and the possible approval of Orexigen Therapeutics' (NASDAQ: OREX  ) Contrave which has completed an extensive cardiovascular outcomes study (known as the Light Study) might make it the preferential anti-obesity drug choice among physicians. With few guarantees that Aspen will even follow through with its bid, or even get the funding for that matter, I would consider using today's pop to head for the exit if I were a shareholder.

VIVUS shares may have soared today, but it'll likely have a tough time keeping pace with this top stock over the long run.
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (5) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 28, 2014, at 2:53 PM, marp11 wrote:

    LIGTH STUDY NOT COMPLETED SEANNY BOY

    The safety study for OREX is NOT exhaustive. Our concern is centered around the seizures experienced from Topiramate, and the combination of two generics to form the "new" single pill drug.

    Such a similar story to VVUS' product..

    The LIGHT study is not done---the submission is off interim data at a mid-point. The study is ongoing--not completed.need a regulatory lesson!

    More data was collected from this study than the MACE parameter. That parameter allowed them to submit per their SPA, and likely was met.

    But that is not the totality of the data collected in the study to date.

    That includes more safety data that has safety considerations other than MACE. remember the agency reviewed this for 6 months--more N and more than MACE within it!

    The companies data generated was not presented publically for much of anything other than they met MACE, so you have no way of knowing if there are issues that have arisen from the running this study within the data and they cherry-picked the data they would release.

    You have no way of knowing what the FDA views the rest of the data as supportive or confounding, or damaging!

    And its because none of it was made public other than the little they told you about.

    This drug could get approved at PDUFA time and it also could be delayed because data they haven't released could trip them up and signal a CRL to obtain more LIGHT data.

    Its up to you to decide which way the decision will go, but approval is not in the bag yet

  • Report this Comment On May 28, 2014, at 2:53 PM, marp11 wrote:

    The LIGHT study is not done---the submission is off interim data at a mid-point. The study is ongoing--not completed. Matasow needs a regulatory lesson!

    More data was collected from this study than the MACE parameter. That parameter allowed them to submit per their SPA, and likely was met. But that is not the totality of the data collected in the study to date. That includes more safety data that has safety considerations other than MACE. remember the agency reviewed this for 6 months--more N and more than MACE within it!

    The companies data generated was not presented publically for much of anything other than they met MACE, so you have no way of knowing if there are issues that have arisen from the running this study within the data and they cherry-picked the data they would release. You have no way of knowing what the FDA views the rest of the data as supportive or confounding, or damaging! And its because none of it was made public other than the little they told you about.

    This drug could get approved at PDUFA time and it also could be delayed because data they haven't released could trip them up and signal a CRL to obtain more LIGHT data. Its up to you to decide which way the decision will go, but approval is not in the bag yet

  • Report this Comment On May 28, 2014, at 3:01 PM, marp11 wrote:

    if VVUS is worth 640 million>

    ARNA with BELVIQ ,CASH,PIPELINE AND ROW

    worth 10 BILLION

  • Report this Comment On May 28, 2014, at 7:26 PM, rufustherat1 wrote:

    marp11 ,

    Are you mentally challenged or just pretending to be ? "concern is centered around the seizures experienced from Topiramate " You idiot, Topiramate is a common medication used treat seizures not cause it.

    Then the facts regarding Orex's Contrave:

    The facts are:

    September 2011: Orexigen Therapeutics, Inc. met with senior officials in FDA's Office of New Drugs (OND), the Company received written correspondence detailing OND's design requirements for a cardiovascular outcomes trial (CVOT) for Contrave that would address the Complete Response Letter (CRL) received in January 2011. FDA stated that "if the interim analysis meets the specified criteria to exclude an unacceptable increased cardiovascular isk, the drug could be approved." Furthermore, the FDA stated that "While we still plan to convene a public advisory committee meeting to discuss topics related to obesity drug development early next year, that meeting will not impact on the advice provided in this letter and the agency will honor the advice provided."

    As the interim analysis of Contrave in the LIGHT trial has meet the specified criteria to exclude an unacceptable increased cardiovascular isk, the agency (FDA) should honor the advice provided and approve Contrave. VVUS and ARNA were approved with far less information and without a CV risk data so there is no reason Contrave will not be approved

  • Report this Comment On May 29, 2014, at 8:30 AM, marp11 wrote:

    28% drop out rate for contrave and many facts FROM LIGHT STUDIES still never released by CEO make OREX a very very great risk.

    even if approved 2 GENERICS see VVUS

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2974350, ~/Articles/ArticleHandler.aspx, 8/28/2014 9:24:07 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement