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Satisfying Clinical Trial Straightens Up Shares

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Alongside a tedious pathway to approval of its obesity drug Qnexa, it's nice to see VIVUS (Nasdaq: VVUS  ) strengthening the other half of its clinical pipeline.

The company announced today that its erectile dysfunction drug, avanafil, was successful in treating patients that had a radical prostatectomy. The surgery often causes erectile dysfunction that can be especially hard to treat. It can be difficult to cut out the prostate tumor without affecting other male-centric issues.

VIVUS didn't release the data -- the full results will be presented at a medical meeting next month -- but the company did say avanafil beat a placebo in three different measurements for erectile dysfunction. Investors are likely to be satisfied with the detailed results.

The trial in patients following a radical prostatectomy isn't necessary for an FDA approval -- VIVUS already has positive phase 3 data -- but the trial data will be on the label to support its use in this specific type of patients. VIVUS plans to submit the marketing application to the FDA in the next month or so.

The company can use all the help it can get on the marketing front. After its approval, avanafil will have to compete against Pfizer's (NYSE: PFE  ) Viagra, Eli Lilly's (NYSE: LLY  ) Cialis, and Merck (NYSE: MRK  ) , GlaxoSmithKline (NYSE: GSK  ) , and Bayer's Levitra -- all of which have been around for a while. Avanafil works in just 30 minutes, which is faster than the onset of the other drugs. Spontaneity should be an excellent selling point, but VIVUS still has its work cut out for it, especially with cheap generic versions of Viagra hitting the pharmacies next year.

At a market cap of just over $700 million, investors aren't expecting avanafil to be a blockbuster anytime soon. Nor have they put much faith in the approval of Qnexa. A surprise on either drug could solidify shares further, although at this point there's little chance of that happening.

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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of GlaxoSmithKline. Motley Fool newsletter services have recommended buying shares of GlaxoSmithKline and Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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