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

To: DaiS who wrote (13565)	8/18/1998 11:56:00 AM
From: betty moyers	Respond to of 23519

DiaS, A few comments addressing your questions and concerns : 1) Squaring estimate with Analyst's values. As has been pointed out, one has to know the analyst's agenda. Their estimates are not necessarily based on the known evidence. They have agenda's. A stock I had in a prior year JBIL (wish I had ridden to the top but did make money) languishing at 7 miserable estimates after they had lost some business. Annihilated estimate after estimate as they went up. Analysts deliberately understated (euphomism for lied) early on. Then when stock was peaking they overestimated to hold it up for big money to get off (the same big money they help buy as ludicrously low prices). 2) Manufacturing problems statement and its impact. A lot has already been said. I too believe it is a protective statement. Every manufacturing company has "various manufacturing difficulties" every quarter. Off spec product that must be reworked (for example,in the paper industry it is called broke. You throw it back in the pulper maybe at 10 % along with fresh pulp on a lower grade paper) or trashed. Equipment breakdowns (as it ages), which since Vivus's equipment is new are probably qlitches of being broken in. Yes these manufacturing problems reduce the bottom line. How much? depends on how severe they are. How much product is lost? How much downtime? Now that we are a manufacturing company as well as an R&D company, we will have this impact quarter after quarter. 3) The accuracy of the >0.40 earnings. It was a rosiest case senerio. I never expected us to be that high. But I believe it does say that we can make > 0.10 thus beat the estimates handily given normaly problems and expences. Additional costs not in the estimate are manufacturing problems, expenses of Ireland plant building (I think not significant at this point) and new equipment costs (discussed next). 4) Equipment leasing, I believe is a great idea for us and the bottom line. An outright purchase of equipment would be expensed. Though it is a one time item it still would come off the bottom line. By leasing, the company only has to subtract the cost of each quarter's lease payment from revenues. Our numbers will look better more quickly. 5) As to payments and credit line.... I repeat again, Vivus sells to Astra and Janssen period (ex in US currently). They are paid for product by Astra and Janssen when recieved by them. However, a bill must be submitted to accounting, processed, and paid. Generally, terms are 30 to 45 days same as cash. Thus, Vivus needs cash flow to bridge the normal time gap of processing payment. They must continue to buy supplies and produce product. It is normal for a company to have a credit line to do this. Vivus would definately need this, as they are small with little cash reserve (currently "negotiable"securiies are non-negotiable securities in my book). Do I think we are going to make the estimate calculated - IMO not a chance. Do I think we will make > 0.10. From everything know to date, absolutely.