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Jefferies Downgrades Vivus (VVUS) to Underperform On Generic Risk

August 17, 2012 7:12 AM EDT Send to a Friend
Get Alerts VVUS Hot Sheet
Price: $4.92 +2.29%

Rating Summary:
    4 Buy, 7 Hold, 5 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 23 | Down: 25 | New: 18
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Jefferies downgraded Vivus (NASDAQ: VVUS) from Hold to Underperform with a price target of $16.00 (from $31.00), citing generic competition.

"While investors have been primarily concerned about Qsymia patents, we believe that a bigger concern could emerge in the ability of physicians to prescribe generic topiramate and phentermine in lieu of Qsymia," analyst Thomas Wei states. "Our preliminary diligence suggests physician liability, VVUS' primary defense, is not a significant risk."

"There is a strong motivator for physicians to prescribe the two generics since branded Qsymia is unlikely to be covered by payors and the two generics will be more affordable for patients," Wei states.

Data suggest no material difference between Qsymia and a morning phentermine/evening topiramate regimen, he notes.

In addition, the analyst said after reviewing key literature on liability associated with off-label prescribing, as well as consulted with a Harvard physician/lawyer who has authored a NEJM editorial on physician malpractice risk related to drug prescribing, and "we are increasingly skeptical that the liability fear will remain a long-term barrier to generic uptake."

The analyst lowed peak sales estimates for Qsymia from $3.6 billion to $1.2 billion.

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 $22.76 yesterday.




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Comments

Vivus
Reality Turd ^ on 2012-08-17 19:33:22
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Its funny when VVUS gets a kick, all the cry babies come out of the wood works, and then blame others for their negligence. Understand its all part of a game, OREX is going to be played up and down till mid 2013 (approval date). All the VVUS babies should pipe down, btw VVUS numbers will disappoint and it will not tank, but will decrease VVUs should be between $15-20, ATM because wallstreet hyped them up and ARNA beat them +novel 1.

JPM gave a upgrade for VVUS because they think VVUS will do a dilution to raise funds they clearly do not have, so they want a piece of the pie for underwriting.

VVUS efficiency < health and doctor's will not prescribe due to severe REMS and potential lawsuits

Start wining kiddies.

BS
rjrboka on 2012-08-17 09:10:13
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Jefferies analyst dont know what they are doing. In early July they said the downgrade vvus to $9, then after the FDA approval raised to 31 now back to16??? Also i guess the arna obesity drug can be bybassesd for generic too?? but Arna only has prover 5% wieght loss but Qsymia has proven 10%

VIVUS DOWNGRADE
Reality Trader on 2012-08-17 08:13:44
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The BS games between ARNA and VVUS continue.
What did you expect ARNA"S underwriter to do.
By the way, the only upgrade ARNA EVER got was from JEFFRIES.
Want to play this sector? Buy OREX and wait a little while. Both of these two carry too much baggage.


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