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Leerink Swann Reiterates Outperform on VIVUS (VVUS), Review in Health Economics A Positive

March 27, 2013 8:21 AM EDT Send to a Friend
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Price: $5.36 +2.10%

Rating Summary:
    4 Buy, 7 Hold, 5 Sell

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Today's Overall Ratings:
    Up: 18 | Down: 9 | New: 22
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Leerink Swann today maintained an Outperform rating on VIVUS, Inc. (Nasdaq: VVUS) with price target of $19 to $20. Analyst Marko Kozul said he thinks management is making solid progress by pushing out financing risk and building momentum. The comments follow a $110 million non-equity financing deal announced yesterday.

"The $110M royalty non-dilutive financing pushes out financing risk and helps mitigate previous higherthan- anticipated spend on building the obesity market,” said Kozul. “The recent Qsymia pharmaco-economic analysis published in Health Economics Review should serve as a useful additional reimbursement tool, especially for Medicare."

"The article concluded there are meaningful benefits to pharmacotherapy reimbursement over 10 years and over the lifespan of obese patients. After a late 2012 push by Senator Carper on the obesity front, we believe he will reintroduce this discussion later in 2013. A review of this nature gives politicians a tangible analysis on which to deliberate potential future policy. In our broad obesity model, we assume government begins to reimburse for obesity drugs in 2016. Legislature providing earlier reimbursement would provide meaningful upside to our current estimates," said the analyst.

Kozul thinks 'increasing access' and 'reimbursement news' will be the main drivers for the obesity space in 2013.

For an analyst ratings summary and ratings history on VIVUS click here. For more ratings news on Vivus click here.

Shares of VIVUS closed at $10.63 yesterday.




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