Don't Hold Your Breath Waiting for a VIVUS Inc. Buyout

Last week, Aspen Investment disclosed a 9.65% stake in VIVUS (NASDAQ: VVUS  ) and said it's considering a $640 million purchase, which would be made definitive by June 13.

As senior biotech specialist Brian Orelli and health-care analyst David Williamson discuss in the following video, the key word there is "considering." By the size of its investment, it's clear Aspen thinks VIVUS is undervalued, but it's not clear whether the potential bid is a serious one or just a ploy to try to get the shares higher.

If it is a serious bid, it might not be the best news for Arena Pharmaceuticals (NASDAQ: ARNA  ) and Orexigen (NASDAQ: OREX  ) , as it would put a floor on the potential price for obesity drugmakers. Arena Pharmaceuticals and Orexigen would be better off if VIVUS was being pursued by a large pharma, as it would give investors confidence that Arena and Orexigen might eventually be taken out by their respective partners, Eisai and Takeda.

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Read/Post Comments (7) | Recommend This Article (4)

Comments from our Foolish Readers

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  • Report this Comment On June 05, 2014, at 8:57 PM, IraHopp wrote:

    Like Sara Pella use to say wheres the beef.Article has nothing to do with headline.Seeing vvus has 200 million in cash that would lower the take over for Aspen from 620 a share to about 420 a share. It never get mentioned

  • Report this Comment On June 06, 2014, at 4:05 AM, marp11 wrote:

    poor osmelli

    confusing a 2 generic loser again

    with a real bio pharma..

    osmelli makes AF look good.

  • Report this Comment On June 06, 2014, at 4:07 AM, marp11 wrote:

    what osmelli means is if a craphole like vvus

    got 640 million

    a real company like ARNA with cash,partners,pipeline and LOCASERIN

    would fetch over 10 BILLION

    and that terrifies brian and his ARNA SHORT MASTERS

  • Report this Comment On June 06, 2014, at 7:51 AM, OriginalNewman1 wrote:

    Now that OREX has passed the FDA scrutiny

    on the results of the Phase 3 tests, and apparently it also looks like the Light Study (8900 Patients) which was over and above the required amount)on heart related issues showed no dangers for any cardiac concerns.

    How else will the FDA find a way to delay CONTRAVE????? esp. when they Didn't require the other two companies from conducting any of these tests.

  • Report this Comment On June 07, 2014, at 12:58 AM, Vanmusicblues wrote:

    The floor comes from turning losses into profits. VVUS is now valued on Stendra, not Q

  • Report this Comment On June 07, 2014, at 9:33 AM, MichaelHamilton wrote:

    There is no reason why this company should be valued less than Arena. It has higher sales and more products. Whoever buys this company at $640m will get a bargain price though I don't think a large pharma would be interested.

  • Report this Comment On June 09, 2014, at 3:42 PM, gazoo99 wrote:

    VVUS is a Joke & Broke.

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