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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)
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To: blankmind who wrote (5923)3/17/1998 9:12:00 AM
From: Don Dunlap  Read Replies (3) of 23519
 
Blankmind <<- Concerning the impact of the "at-risk" product of the new plant on 1st 1/4 results:
they won't be included as revenue. The costs won't drag down earnings either - rather
- look for them to show up in "Inventory." Inventory will go from $9 mill to $13 or $14
mill.>>

If the costs won't drag down earnings this quarter, what IS dragging down earnings? Several posters on this board suggested that earnings would be negative because VVUS was running a new facility with no corresponding revenue. The costs won't be recognized until the product is sold, and neither will the revenue. I imagine the costs of building the plant are capitalized, so that should not affect revenue either. These costs will affect cash flow, but not earnings.

So, where are all the costs coming from that will cause VIVUS to lose money? Is it because they are shipping product to Astra for less than the cost of production? Or is it to pay for advertising>
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