VIVUS Reports Third Quarter and Nine Month Financial Results
MOUNTAIN VIEW, Calif.--(BW HealthWire)--Oct. 15, 1998--VIVUS,
Inc. (Nasdaq:VVUS) today reported a net loss of $54.7 million, or
$1.72 per share, for the quarter ended September 30, 1998, compared
with net income of $11.3 million, or $0.31 per share, for the same
period in 1997.
For the nine months ended September 30, 1998, the net loss was
$81.3 million, or $2.55 per share, compared with net income of $30.8
million, or $0.86 per share for the same period in 1997. Product
revenues for the third quarter were $18.1 million compared to $16.0
million for the second quarter of 1998, and $39.1 millioo for the
third quarter of 1997. Also during the quarter, VIVUS received a $2.0
million milestone payment from Janssen Pharmaceutica for the approval
of MUSE(R) (alprostadil) in Canada.
During the course of the quarter, the Company took significant
steps to restructure its operations in an attempt to bring the cost
structure of the business in line with the current demand for MUSE.
These steps included significant reductions in headcount in all
departments, as well as the closing of VIVUS' contract manufacturing
site located within PACO Pharmaceutical Services, Inc., and the
consolidation of employees at the Company's corporate headquarters
into a smaller space within its current building. As a result, the
Company recorded $54.2 million of costs and write downs during the
quarter: a $16.0 million write-down of inventory, primarily raw
materials, which is included in "Cost of Sales;" a $32.2 million write
down of property; and $6.0 million of other restructuring costs
primarily related to personnel costs and operating lease commitments.
Cash, cash equivalents and available-for-sale securities at
September 30, 1998 totaled $25.5 million, compared with $25.4 million
at June 30, 1998, and $91.7 million at December 31, 1997.
Corporate Update
As part of the restructuring, VIVUS has made significant
reductions in headcount in all departments. The Company's contract
manufacturing plant, PACO, has ceased production of MUSE. All product
will be maoufactured now at VIVUS' own facility in New Jersey. It was
also determined during the third quarter that at the current demand
rate, VIVUS has the ability to supply its international partners as
well as domestic demand from its manufacturing facility in New Jersey,
therefore, plans to build an additional plant in Ireland have been
discontinued.
VIVUS' executive offices will remain in Mountain View,
California. The officers of the Company include: Leland Wilson, CEO
and President; Neil Gesundheit, Vice President, Clinical Development;
Carol Karp, Vice President, Regulatory Affairs; Terry Nida, Vice
President, Europe; William Smith, Vice President, Research and
Development; and Richard Walliser, Interim Chief Fioancial Officer.
Total headcount for both facilities will total approximately 110
employees.
Clinical and R&D Update
Activity within projects in VIVUS' clinical development programs
as well as its research and development pipeline is encouraging.
VIVUS' second-generation transurethral treatment for erectile
dysfunction, ALIBRA(TM), is currently in Phase III clinical trials.
Preclinical development programs in sexual dysfunction, including
VIVUS' gene therapy program for the treatment of erectile dysfunction,
as well as the Company's urinary incontinence program, continue to
move forward.
International Sales and Marketing
During the third quarter, MUSE was approved and/or launched in
seven countries, including: Canada, New Zealand and Hong Kong,
bringing the total number of 1998 international approvals to 16. In
August, Astra AB and VIVUS presented MUSE to the international
physician community at the International Society of Impotence Research
held in Amsterdam, the Netherlands. Several positive abstracts on MUSE
were presented by the Company and by independent investigators. A
significant number of attendees visited the MUSE booth and received
educational and promotional information.
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).
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VIVUS, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
September 30,
---------------------
1998 1997
(unaudited) (unaudited)
Revenue
US Product $ 3,485 $ 39,118
International Product 14,579 --
Milestone 2,000 --
--------- ---------
Total revenue 20,064 39,118
Operating Expenses
Cost of goods sold (1) 28,297 11,270
Research and development 4,673 3,947
Selling, general and admioistrative 3,882 11,507
Write-down of property 32,163 --
Other restructuring costs 5,968 --
--------- ---------
Total operating expenses 74,983 26,724
Income (loss) from operations (54,919) 12,394
Interest and other income 194 1,106
Income (loss) before taxes (54,725) 13,500
Income tax (provision) benefit -- (2,241)
--------- ---------
Net income (loss) $ (54,725) $ 11,259
Net income (loss) per diluted share: $ (1.72) $ 0.31
Shares used in the computation of
net income (loss) per diluted share: 31,806 35,772
Nine Months Ended
September 30,
-----------------------
1998 1997
(unaudited) (unaudited)
Revenue
US Product $ 34,178 $100,367
International Product 26,391 --
Milestone 3,000 5,000
Total revenue 63,569 105,367
Operating Expenses
Cost of goods sold (1) 49,483 28,920
Research and development 13,912 7,914
Selling, general and administrative 38,516 34,574
Write-down of property 32,163 --
Other restructuring costs 12,490 --
--------- ---------
Total operating expenses 146,564 71,408
Income (loss) from operations (82,995) 33,959
Interest and other income 1,702 3,491
Income (loss) before taxes (81,293) 37,450
Income tax (provision) benefit -- (6,679)
--------- ---------
Net income (loss) $ (81,293) $ 30,771
Net income (loss) per diluted share: $ (2.55) $ 0.86
Shares used in the computation of
net income (loss) per diluted share: 31,893 35,602
(1) Cost of goods sold for three months and nine months ended
September 30, 1998 include a $16.0 million write-down for excess
inventory and future inventory purchase commitments.
VIVUS, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
1998 1997
(unaudited)
Current assets
Cash $ 4,690 $ 6,161
Available-for-sale securities 13,516 52,955
Accounts receivable 7,960 11,791
Inventories 7,785 9,084
Prepaid expenses and other assets 961 1,636
Total current assets 34,912 81,627
Property and equipment 20,036 36,462
Available-for-sale securities,
non-current 7,301 32,580
Total $ 62,249 $ 150,669
Current Liabilities:
Accounts payable $ 13,037 $ 6,574
Accrued and other liabilities 28,899 20,165
Total current liabilities 41,936 26,739
Stockholders' equity:
Common stock; $.001 par value;
shares authorized 200,000;
shares outstanding -
September 30, 1998, 31,824;
December 31, 1997, 33,168; 32 33
Paid in capital 131,086 153,336
Accumulated other comprehensive
income 25 98
Accumulated deficit (110,830) (29,537)
--------- ---------
Total stockholders' equity 20,313 123,930
Total $ 62,249 $ 150,669
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CONTACT:
VIVUS
Nina W. Ferrari, 650/934-5200
IR@VIVUS.COM |
