Thursday, May 11, 2006

VIVUS, Inc--Better than Sex!

Last week, when VIVUS, Inc. was selling for $3.06 per share, we recommended the purchase of the Common Stock of this biopharma concern, which is developing treatments for male and female sexual disorders. Succinctly, our investment thesis read: “Vivus has an enterprise value of only $114.7 million. This stock is cheap and does not reflect the future value potential of its proprietary drug portfolio— the four leadership products in development are each targeting markets with more than $1 billion in annual sales.”

Shares of VIVUS have jumped almost 41% in the last three trading days after the Company announced positive clinical results from two drugs in development. First, the Company said on Friday that its spray-on menopause treatment, Evamist, significantly reduced hot flashes in a late-stage clinical study.

Second, corporate reported earlier today that a weight-loss trial showed that participants given the Company’s proprietary weight-loss drug, Qnexa, reportedly lost an average of 25.1 pounds after 24 weeks, compared with the average 4.8 pounds in the placebo group.

We suggest that our readers heed the advice of our favorite Wall Street aphorism: a bull makes money, a bear makes, money, but a hog never makes anything. A 41% gain in nine days? SELL and walk away—for now….


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