Jefferies Comments on VIVUS (VVUS) Qnexa Label Change; Not Necessarily a Positive Indicator
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Rating Summary:
3 Buy, 9 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
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Jefferies (NYSE: JEF) issued comments on VIVUS (Nasdaq: VVUS) Tuesday, maintaining a $3 price target and Underperform rating.
The firm said it was unable to determine the proper interpretation of the FDA announcement issued Monday. According to the release: "following recent discussions with Food and Drug Administration (FDA) officials, the company has been asked to remove the Qnexa contraindication for women of childbearing potential contained in the proposed label. Qnexa would remain contraindicated for women who are pregnant. A contraindication typically indicates that a drug should not be used because the risk of use clearly outweighs any possible therapeutic benefit."
Jefferies said it is "uncertain whether the market should interpret this as an endorsement by the FDA of the broad indication or of the FORTRESS data." So, it remains cautious of Qnexa approvability.
A little more color on the call from Jefferies, "We favor an argument where the FDA’s request for the label change may be related to a desire to have a full debate on the teratogenicity question and the FORTRESS data at the upcoming panel meeting, perhaps with a voting question on whether Qnexa should be granted broad approval or limited approval. Today’s announcement could be viewed as an incremental positive for VVUS, with the company gaining the possibility of a broader approval, but we remain cautious on this outcome given the magnitude of the signal that has been observed in FORTRESS, the small amount of time the FDA has had to review the FORTRESS data since becoming available in December, and the lack of validation of the FORTRESS data, which VVUS expects to complete in 2H12."
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 $11.65 yesterday.
The firm said it was unable to determine the proper interpretation of the FDA announcement issued Monday. According to the release: "following recent discussions with Food and Drug Administration (FDA) officials, the company has been asked to remove the Qnexa contraindication for women of childbearing potential contained in the proposed label. Qnexa would remain contraindicated for women who are pregnant. A contraindication typically indicates that a drug should not be used because the risk of use clearly outweighs any possible therapeutic benefit."
Jefferies said it is "uncertain whether the market should interpret this as an endorsement by the FDA of the broad indication or of the FORTRESS data." So, it remains cautious of Qnexa approvability.
A little more color on the call from Jefferies, "We favor an argument where the FDA’s request for the label change may be related to a desire to have a full debate on the teratogenicity question and the FORTRESS data at the upcoming panel meeting, perhaps with a voting question on whether Qnexa should be granted broad approval or limited approval. Today’s announcement could be viewed as an incremental positive for VVUS, with the company gaining the possibility of a broader approval, but we remain cautious on this outcome given the magnitude of the signal that has been observed in FORTRESS, the small amount of time the FDA has had to review the FORTRESS data since becoming available in December, and the lack of validation of the FORTRESS data, which VVUS expects to complete in 2H12."
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 $11.65 yesterday.
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