ThinkEquity out on VIVUS (NASDAQ:VVUS), saying that they believe the upcoming presentation and review of Qnexa Phase II clinical trial data at the North American Association for the Study of Obesity (NAASO), a major scientific meeting targeted at obesity, for the first time should be one of the final steps in completing the transformation of Vivus into a potential important player in the obesity market. The next steps are updates on toxicology studies, formulation, and a special protocol assessment by the FDA. Firm continues to believe VVUS shares are undervalued based on the potential of Qnexa alone with a free call-option on the broad, late-stage product pipeline.
Though the positive Phase II Qnexa clinical trial results that showed a placebo-adjusted mean weight loss of 20.3 pounds or 8.6% at six months without plateauing have been shown before, additional clinical data points could be shared. The most important development, in firm's view, is that Qnexa data will be reviewed and discussed by Dr. Kishore Gadde of the Duke University Medical Center at an obesity-focused scientific forum for the first time.
Firm has learned that the society only accepts six abstracts as a podium presentation and the Qnexa data are one of them. They believe a presentation in front of a major obesity-focused research and clinical audience along with the expected SPA for the Phase III program by YE06/early 2007 should complete the outlook on Vivus as a major player in the obesity market.
While Qnexa has taken center stage, firm believes Vivus' proprietary pipeline of products targeted at sexual disorders also represents potentially monetizable assets. Of these the most advanced are Evamist, a differentiated estrogen that could be approved by YE07, and Testosterone MDTS for female hypoactive sexual desire disorder, an SPA which could be approved by early 2007.
Firm has Buy rating on the shares with $9 price target.
Notablecalls: Nothing new in this note. However, such a high price target may bring buying interest if the note gets some attention. One to watch today.