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

To: BigKNY3 who wrote (19275)	3/6/1999 3:24:00 PM
From: VLAD	Respond to of 23519

I just finished writing a rather long post assessing why I feel Vivus is grossly over sold. My computer got disconnected and I don't have time to redo the who thing. Here then is a summary on valuation on Vivus: 1)MUSE is still relatively unavailable to world markets. So far England, Sweden and Switzerland are the only European countries which have launched MUSE. They constitute only 9% of the total population of Europe. Thus far the results of MUSE sales in countries where it is being detailed to the medical community and Viagra is also available looks promising. England is the only sizable sample country to compare sales. The second largest market in the world is Japan and it is untouched by Vivus. China spends over $1 billion annually on sexual aids and MUSE will be available later this year. The United States has never had a real sales force marketing MUSE to the PCPs. the point I am making is that I still see a lot of potential for MUSE sales. THE PRODUCT HAS NOT ACHIEVED EVEN 10% OF ITS GLOBAL MARKETING POTENTIAL. 2)Compare the current short interest still held on Vivus shares as it compares to some of Vivus' NASDAQ small cap counter parts(eg. ICOS, LIPO, CEPH). Vivus still has OVER 18% of its outstanding held short as compared to: ICOS-4% LIPO-1.5% CEPH-1% Don't tell me that the stock has not been effected by market manipulation. Over 8.5 million shares have been covered since last May and yet the share price remains near its all time low. Market makers can and do short stock for their own profits. currently there are about 5 market makers who have had a habit of shorting Vivus whenever it has shown strength. This explains why the stock has not been able to break out of a trading range of 2 to 4 over the past 7 months. 3)The shorts have long been crying that the sky is falling on Vivus. Part of their negative propaganda included saying in mid 1998 that Vivus would run out of cash. Since that time two quarters have passed with a net of ZERO on the cash burn rate. The latest seed of worry that the shorts have planted is that Vivus will not be able to afford to fund it's current R&D. This can not be further from the truth. Vivus' current financial health is stable and whereas in a few past quarters it was spending 4 to 5 million on R&D it is now back to spending about $2M per quarter which is comparitable to its spending in Q1 and Q2 of 1997. There is no reason why Vivus will not be able to fund all R&D through the commercial launch of MUSE. By the time MUSE is fully launched, Alibra will be approved and commercially available as a more effective product with fewer side effects(not to mention less costly to produce). I am also told that Vivus has another product in the wings that we should hear more about later this year. In conclusion, contrary to the short interests propaganda, Vivus is nowhere near bankrupt and with the fiscal conservatism undertaken by the new CFO there is no current threat of Vivus burning through its current cash position of approximately 24 million dollars. Vivus will be profitable throughout 1999. Whether this profitability will be significant will depend on 2 factors including the speed of international launches and if a domestic partner is signed that can boost US sales. 4)Comparing Vivus to Pfizer is like comparing some tiny software company to Microsoft. Also, it is unfair to compare prescription numbers between Viagra and MUSE since a large porportion of men consuming Viagra do so for recreational purposes or purely as an erection enhnacer. These men were never part of the potential MUSE pie to begin with. Another short propaganda falicy is that other orals will cut into the ED pie effecting MUSE sales. I don't see that happening. If Viagra doesn't work on a given case, I certainly don't see Vasomax or apomorphine doing the trick. If the doctor is concerned with the Viagra safety issues then he will turn to MUSE rather than a product such as Vasomax that also creates significant hypotension. Other product are still quite some ways from reaching the market. Topicals such as TOPIGLAN have not even reached phase 3 trials and are not cost effective and IMHO are gimicks which will never capture any significant market share IF they are ever approved. Bottom line is that Vivus is down but not out. I believe Vivus will show at least a .40 to .50/share profit in 1999. If this is so then certainly by all standards of evaluating a small cap biotech stock it is grossly undervalued. Let the chips fall where they may. The idea is for the market makers to get as many share holders as possible to throw in the towel so they can cover the rest of those 5.8 million shares held short. IMO as the year rolls on it will become harder and harder. Look at the volume over the past 2 weeks. IMO there has been little if any real trading other than the market makers continuing to play their games. VLAD PS Expect to see new coverage of Vivus later this year once Europe is launched and "other" things pass allowing for a vissible earnings picture.