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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)
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To: Andreas Samson who wrote (21151)4/23/1999 4:45:00 PM
From: VLAD  Read Replies (1) of 23519
 
AS,

Spoke with Vivus today.

They had a choice looking forward the next few quarters:

1)Take all their earnings from product sales and keep SG&A AND R&D low and show some nice earnings for a small biotech company. Short term good for stock price/long term bad for company fundamentals.

2)Stay conservative on the SG&A and invest product profit into the various products in their R&D portfolio (6 to be exact).

Seeing that the very nature of most small cap biotechs is to excell on the R&D front and allow a big pharma to take care of the rest, do you think it UNWISE for Vivus to invest its product profits on their R&D pipeline? Seems to me that there are hundreds of biotechs that have never made a dime or developed a single product and they generally just burn cash they get from larger drug companies. At least Vivus is not dependent on large pharmas throwing them bones to keep the R&D going. They will use their product sales profits to fund their R&D AND SINCE THEY ARE INDEPENDENT THEY DON'T HAVE TO GIVE UP FUTURE PRODUCT RIGHTS TO ANOTHER COMPANY THAT THEY WOULD OTHERWISE BE DEPENDENT ON FOR R&D FUNDING!!! Understand the concept?

Also, I learned today that in negotiating for MUSE they certainly would include rights to Alibra but will not include marketing rights to any of the other products they are working on. Me thinks this is a wise move as they can then negotiate separate deals for separate products to whatever company will give them the most favorable deal.

This is good.

More later.

VLAD
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