Here are the numbers. Boy, are they pretty?
VIVUS Reports Second Quarter and Six Month Financial Results
MOUNTAIN VIEW, Calif.--(BW HealthWire)--July 9, 1998--VIVUS, Inc. (NASDAQ:VVUS) today reported a net loss of $24.2 million, $0.76 per share, for the quarter ended June 30, 1998, compared with net income of $10 million, $0.28 per share, for the same period in 1997.
Included in the second quarter 1998 results is a one-time charge of $6.5 million related to restructuring charges. For the six months ended June 30, 1998, the net loss was $26.6 million, or $0.83 per share, compared with net income of $19.5 million, or $0.55 per share for the same period in 1997.
Product revenues for the second quarter were $16.0 million compared to $33.5 million for the same period in 1997 and $26.5 million for the first quarter of 1998. The decline in revenue is attributable to the commercial U.S. launch of Viagra (sildenafil), a competitive oral treatment for erectile dysfunction. Underlying demand for MUSE domestically, as measured by retail prescriptions, has declined approximately 70% since pre-sildenafil launch prescription levels.
Internationally, revenues increased from $2.0 million in the first quarter of 1998 to $9.8 million in the second quarter of 1998 as the Company's international marketing partners, Janssen Pharmaceutica and Astra AB, launched and prepare to launch in various countries. There were no international revenues in the second quarter of 1997.
The combination of higher international shipments, which have a lower per unit revenue than domestic sales, and start up costs for VIVUS' new manufacturing plant resulted in lower gross margins compared with both the second quarter of 1997 and first quarter of 1998.
In addition to the decline in gross margins, net earnings in the second quarter of 1998 were also negatively impacted by higher selling and marketing expenses primarily associated with the Innovex contract pharmaceutical sales organization and a one-time charge of $6.5 million related to the Company restructuring its operations.
Yesterday, the Company announced its decision to seek a major pharmaceutical partner to promote MUSE(R) (alprostadil) in the U.S. and its comprehensive effort to reduce expenses. As a first step, the Company has agreed to facilitate the transition of its urology sales force to ALZA Corporation. Sales personnel joining ALZA will continue to sell MUSE on a limited basis until December 31, 1998. VIVUS has also terminated its agreement with Innovex.
"In recent months the erectile dysfunction market has made a major shift toward the primary care physician (PCP). This shift has necessitated a change in VIVUS' strategy and the decision to partner in the U.S. with a large pharmaceutical company. The success of VIVUS' partners in launching MUSE worldwide has demonstrated the benefits of being a well-known presence in the marketplace," said Leland Wilson, President and CEO of VIVUS, Inc. "Our strategy change also has the immediate benefit to VIVUS of reducing expenses and poising the Company for a return to profitability."
Cash, cash equivalents and available-for-sale securities at June 30, 1998 totaled $25.4 million, compared with $44.2 million at March 31, 1998 and $91.7 million at December 31, 1997. The $66.3 million decline in cash from December 31, 1997 resulted from several factors, including the Company's repurchase of its Common Stock during the first quarter of 1998 ($23.6 million), net losses for the first six months of 1998, capital spending associated with the new manufacturing facility in New Jersey, as well as payments in the fourth quarter of 1998 for 1997 sales commissions and the lawsuit, which was settled in the fourth quarter of 1997.
Founded in 1991, VIVUS, Inc. is a leader in the development of advanced therapeutic systems for the treatment of erectile dysfunction, commonly referred to as impotence. VIVUS has pioneered a novel therapy for erectile dysfunction known as MUSE(R) (alprostadil). This therapy consists of a proprietary, non-invasive drug delivery system that delivers pharmacologic agents via the urethra.
Note to editors and investors: Additional written materials, recent releases and Company information are available through a variety of sources, including the VIVUS home page (www.vivus.com) and the VIVUS Fax-On-Demand Service (1-888-329-5719). -0- *T
VIVUS, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30, 1998 1997 1998 1997
(unaudited) (unaudited) (unaudited)(unaudited) Revenue US Product $ 6,142 $ 33,458 $ 30,693 $ 61,249 International Product 9,841 -- 11,812 -- Milestone -- -- 1,000 5,000
Total revenue 15,983 33,458 43,505 66,249
Cost of goods sold 10,704 9,584 21,186 17,650
Gross margin 5,279 23,874 22,319 48,599
Operating expenses: Research and development 5,359 1,940 9,239 3,967 Selling, general and
administrative 17,576 11,258 34,634 23,067 Restructuring costs 6,522 -- 6,522 --
Total operating expenses 29,457 13,198 50,395 27,034
Income (loss) from operations (24,178) 10,676 (28,076) 21,565
Interest and other income 597 1,264 1,508 2,385
Income (loss) before taxes (23,581) 11,940 (26,568) 23,950
Income tax (provision) benefit (597) (1,982) -- (4,438)
Net income (loss) $(24,178) $ 9,958 $(26,568) $ 19,512
Net income (loss) per share: Basic $ (0.76) $ 0.30 $ (0.83) $ 0.59
Diluted $ (0.76) $ 0.28 $ (0.83) $ 0.55
Shares used in the computation of net income (loss) per share: Basic 31,752 32,990 31,938 32,846
Diluted 31,752 35,579 31,938 35,626
VIVUS, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31, 1998 1997
(unaudited) Current assets: Cash $ 1,420 $ 6,161
Available-for-sale securities 8,913 52,955
Accounts receivable 8,170 11,791
Inventories 16,772 9,084
Prepaid expenses and other assets 2,458 1,636
Total current assets 37,733 81,627 Property and equipment 46,878 36,462 Available-for-sale securities, non-current 15,073 32,580
Total $ 99,684 $ 150,669
Current Liabilities: Accounts payable $ 7,370 $ 6,574
Accrued and other liabilities 17,681 20,165
Total current liabilities 25,051 26,739
Stockholders' equity: Common stock; $.001 par value; shares authorized 200,000; shares outstanding - June 30, 1998, 31,767; December 31, 1997, 33,168; 32 33
Paid in capital 130,699 153,336
Accumulated other comprehensive income 7 98
Accumulated deficit (56,105) (29,537)
Total stockholders' equity 74,633 123,930
Total $ 99,684 $ 150,669 *T
CONTACT:
VIVUS, Inc.
Nina W. Ferrari or David Yntema, 650/934-5200 |
