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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Cacaito who wrote (3466)	12/11/1997 11:40:00 PM
From: TokyoMex	Read Replies (1) \| Respond to of 23519

CC notes from friends; V Pres and CFO & Lee Wilson, CEO Mike Levitt, from LLY on staff as Director of Operations (18 years experience) VVUS very sucessful launch since January Commends his staff and employees. Says they are experiencing growing pains. Mike Levitt says he spent last week evaluating NJ plant. New facility will be outstanding, clearly rated with top manufacturing facilities in the world. Going from 6000 sf to 90000 sf. Muse requires temperature and environmental controls Building plant usually takes 18 mos to 2 yrs....this plant has been erected quickly. Not a simple task. Why a move? Move was made because of increasing demand. Want to have experienced people in the new plant to facilitate startup. Learning curve was longer than anticipated as old people were replaced by new...resulting in lower output. Why close at Xmas? Normal shutdowns twice a year for major maintenance. Air and water, etc. so they don't fail during processing. VVUS chose to use yearend as most opportune time. VVUS is a pharmaceutical plant who is stressing quality. This impacted the decisions. Capacity constrained from the get-go of launch of product. Have not had the luxury of spending any money on increasing consumer demand. Feb will be first major marketing push. This results in a demand curve that looks like decreased demand. They expect this to change. They want to create signifcant inventory. No plans to delay advertising. Feel they are adequately covered by FDA and all approvals necessary. Added 25 addtional sales reps. Rolling out a program toward physicians. This is patient driven market. Direct advertising is a must. Pretty close to being on schedule with their plans. Q & A Genesis Merchant How long to take production capicity to full speed? instituting technical imporvements to increase yeilds. Have been running 3 shifts, 6 days per week. Depending upon regulatory approval, MCA, expect to send products to UK soon. FDA approval of plant expected in Feb. What % of product in 1st & 2nd q to UK? 150000 units shipped estimate 200000 for 1st q Paine Webber What types of equipment was transferred and who was moved? Move occured in Oct and November. Learning curve longer than anticipated. Process today takes longer than expected in new facility where they will have their own labs. They use middlemen right now, which slowed them down. Efficiency lower with existing plant. Dain Bosworth Why maintenance now? VVUS knew about the maintenance but had hoped new facility would have avoided this problem. 150000 shipped are they recognized as rev. Will be recorded in q4. 25% production shortfall occured in Nov and first week Dec. Plant constuction delays. No slowdown in demand? CEO says NO! Began w/ 17000/new scripts per week to 10000 new scripts per week. No change in this. It is stable. They have not be able to increase demand because of capacity constraints. Viagra vs Muse? Wilson says PFE hasn't released data yet, so no one really knows how it works. Viagra will be designed for enhancement of erections and mild ED. Hard for systemic product to work well. Possiblity of side effects. Product has not stood rigor or peer reviewed article in the USA or the world. MUSE has. US and UK have approved this. Capital Mgmt. IMF says there is 45 day inventory at major wholesalers. Not adequete inventory for major ad campaign. Suffiecient for day to day. Marketplace isn't accurate in evaluating demand. Average amt of product at the wholesaler...he never has 0. Bear Stearn How many units in old plant? 800000 per month How much are you producing now? 600000 per month now. This will continue thru q 1 VVUS hopes to move to 4 lines of procution in 1/2 half of 98. Capacity can go to 8 lines, depending on demand generation. Paine Webber Will VVUS explain the difference between the 2 drugs when they get hard data. Why wasn't this disclosed earlier? (analyst is upset) VVUS says read the risks in 10Q. When will VVUS be buying stock? VVUS has bought back 400000 shares. Abernathy Group You knew about the plant shut down for maintenace? VVUS hoped to be on faster timeline so that there wouldn't be a lag. VVUS always knew about the maintenance. Had hoped it wouldn't impact the market. How have inventorys been built if production has been curtailed? Wholesale inventories have nothing to do with shortfalls. Inventories from higher capacity. There is a difficult time lag which makes it difficult to tell demand from inventory. That's why they want to increase demand. Richardson, physician and investor When you start up ad campaign will you gear to primary care physican or urologist? VVUS looking at different stratefgies...not divulging now. Another investor VVUS stock slammed when Viagra news came out. Slammed again with production problem. What investment community is concerned about is whether or not demand will be there to support stock price and revs. Can you accelerate your plans to alter public view? VVUS trying to this now. True fact that VVUS not competing against other products. They need to get the patients off the couch and into the doctors office. When PFE launches they will bring many patients to the marketplace and EVERYONE will benefit, including VVUS. Smith Barney Another inventory question. What level of inventory days does wholesaler accept? Depends on how fast the product moves. 45 days is not an issue even for slow moving products. Wants to see VVUS have product in the warehouse. Wholesalers will go beyond 45 days. Substantial backorder in place. Not made public. Pilot Capital VVUS won't comment on future strategies on reaching primary care doctors. IMR is closing 15% of their sites...why is this happening? VVUS unaware about this. Small % of business. Private Investor How will earnings be impacted by new plant. VVUS says new facility will be able to meet demand for 2 years and then will expand. (looks like they dodged this question) Private Investor Crossover of demand vs supply is it 600000 or 800000? VVUS not sure either. Says they are close at this point. The question is how big will demand be once advertising begins. Will increased advertising be necessary to bring plants up to old capacity? Advertising budget set and will be used. Always the intention to seed new plant with old equipment. Need to demonstrate that production is equal in both facilities. How many production lines are used today? They are using 2 lines, 3 shifts in exisitng plant. Will use one line to start. New equipment on order. Expect to go to 4 lines, 2 shifts. That will triple exisiting capacity. Private Investor Are you concentrating in building inventory or building patients? VVUS can't build inventory now. Hope to build the inventory and then get into demand generation. Design will be to balance demand with inventory. Variable is "how much do we need to produce" Question about Italian study. VVUS says they are focused on achieving intercouse not hanging 2 kg weight. DiMarco What % of moderate to severe consists of ED market? In 1991 only severe patients sought help. MUSE has helped patients seek help. Legitimized the problem. Phizer product will be targeted to mild ED. MUSE crosses the gamut of the population. Paine Webber Will you be getting new equipment? They are working on more automation and effiency. Engineer group working on improving the process. Rapid changes not good for this kind of production. Signifcant changes must be approved by FDA. Part of the problem with VVUS is credibility with Wall St. VVUS took too much of a delay with the warning. They felt they might have been able to work thru the problem in a transparant way. Analyst says credibility is lost. (THIS GUY WAS RUDE) Paine Webber Forecasts? Won't divulge. Cash is 100MM. Spent 20 MM so far. Won't forecast margins. VVUS has authorized share re-purchase in place. Comments made quarterly. Restricted from commenting about stock re-purchase now. VVUS is concerned about being bought out. Paine Webber New scripts fairly stable at 10000. Any comment on refills? Refills continue to increase on IMF but audit which doesn't tell picture. In excess of 30% of total. What is time it takes to manufacture a lot until shipment including validation? Production is @ 4 weeks because of sterility testing. Add a week because of outside labs and turnaround time. New faciltiy will have lab. How much product meets labeling requirements? Decrease in output not in yield. Paine Webber Up to date cash figure? Will disclose Jan 28 for year end. 150000 units shipped to Astra, why has domestic inventory increased? Nov and Dec to Astra. Oct production at full capacity and domestic inventory sent then. LL Capital Fall off of production began in Nov. International shipments at lower price. How are releases related to production? When product meets all specifications then it can ship. Is there a build up of product waiting to be released? Nothing in house. Cycle time is constant. Inventory build from 30-45 days. Wholesalers like 45. October inventory is the last known inventory. VVUS can't break down how they produce revenue from week to week. Paine Webber How do you track production? VVUS bases this on QA yield. AFTER it comes back from the lab. So there is a time lag between production and QA. VVUS production uses many people? This is a unique process which has to meet incrediblity stringent criteria. That is why the learning curve was underestimated. END of CALL Joe TPRO </HTML>

To: Cacaito who wrote (3466)	12/11/1997 11:48:00 PM
From: RT	Read Replies (1) \| Respond to of 23519

Cacaito, It sounds like you need a good nights rest. Nighty Night, RT

To: Cacaito who wrote (3466)	12/11/1997 11:50:00 PM
From: TokyoMex	Respond to of 23519

Now, when its all over, Plant in NJ, Ireland and UK ? Three plants putting out effeciently and in volume. Also heard VA hospital ordered 6.5 million bucks worth. Guess Vets are having problems. Joe

To: Cacaito who wrote (3466)	12/12/1997 9:10:00 AM
From: blankmind	Read Replies (1) \| Respond to of 23519

-- VVUS wasn't trying to build the new plant on the cheap. -- Think about what's going on. It actually makes sense. And I agree with the strategy to some extent: 1. New plant has the potential for 8 lines - should demand call for it. 2. Can't make the first batch until approval is obtained. In a sterile plant, not easily obtained. 3. Cannibalize the old plant. Do what you have to do. And get the new plant approved ASAP. 4. And for the old plant, bring new machinery on-line, which they did - but without success - and hence the product shortfall. Out.