Replies to post #137744 on Biotech Values

[biomaven0]

I personally expect the FDA to follow the AC recommendation - not sure about the timing though, as the REMS negotiations can always be slow, and this one is particularly tricky.

I accordingly think the stock is still cheap here - people just haven't gotten their heads around just how big this drug could be. So there must still be substantial approval risk still baked into the stock price.

I really don't know what their plans for marketing the drug are - big pharma could be really scared of yet another diet-drug debacle, but on the other hand we are talking very significant revenue here, even for a big pharma. I'm not sure the drug would even require much in the way of marketing - anyhow the REMS might restrict marketing some. But I'm not sure VVUS would be up to dealing with formulary issues by itself. Logically a big pharma would simply buy them. Note they also have a somewhat differentiated (somewhat quicker acting, more selective) ED drug also up for approval. That would be a complicating factor for 3 of the big pharma.

Peter

[DewDiligence]

Matt Herper’s (cautious) take on VVUS:

http://www.forbes.com/sites/matthewherper/2012/02/23/use-caution-after-vivus-victory

One other factor should make investors nervous: much of the value of FDA approval may be baked in. It’s not impossible, in the wake of a short squeeze, that Vivus stock is closing in on what will be its peak. FDA approvals, though great news, make bad stock catalysts because they are often widely expected. Approval results in a gradual rise in a share price, rejection a sharp drop. I’m not saying to short Vivus, but I do hope fans of the company are taking some profits today.