Vivus investors are still waiting for the company to nail down the marketing partner the company's leadership promised would help turn things around for weight-loss drug Qsymia. In the meantime, the company has inked a second marketing deal for erectile dysfunction drug Stendra--an agreement with Auxilium Pharmaceuticals for rights in the U.S. and Canada that could bring Vivus up to $300 million.
Under the agreement, Vivus ($VVUS) will receive an upfront licensing fee of $30 million from Chesterbrook, PA-based Auxilium ($AUXL). Vivus will also manufacture and supply Stendra for the company, which Vivus CEO Seth Fischer called "the ideal partner" for the drug. Auxilium already touts a portfolio of erectile dysfunction (ED) treatments and testosterone replacement therapies, and it expects to add Vivus' oral med to its list of commercial products later this year. Shipments will begin in December.
Vivus is also eligible for a $15 million payment contingent on a potential label amendment based on a study of how well the drug works in the 15 minutes after use. In trials, the drug has shown it can do its job quickly--in about 10 minutes for the 200 mg dose and 12 minutes for the 100 mg dose--which will give it a boost as it heads into competition with longtime heavyweights Viagra and Cialis. Auxilium says it will field a sales team of 150 reps to combat those market forces, additionally using digital media to connect with a broader audience online.
The Auxilium agreement follows a $121 million overseas deal that Vivus signed in July with Menarini. The Italian company now has rights to roll out the drug in 40 European countries, Australia and New Zealand; Chairman Alberto Giovanni Aleotti expressed hopes that Menarini could launch it in major EU countries early next year. According to Timothy Morris, Vivus' SVP of finance and global commercial development, the two deals combined could generate over $95 million in cash for the company within the first year. That's welcome news for investors, who have been watching as the drug sat on Vivus' shelves since the FDA approved it last April.
Of course, Vivus is still missing the all-important marketing partner for its obesity drug Qsymia. Many have blamed the company's decision to forego a partnership at launch time for Qsymia's dismal sales numbers--including activist investor First Manhattan Co. Earlier this year, FMC rallied investors behind that argument, waging a proxy war that ultimately ousted more than half of Vivus' board. Tony Zook, a former AstraZeneca ($AZN) exec, took the reins as CEO, promising Qsymia marketing help as part of a four-part plan to inject some life into sales. And when he stepped down less than two months later citing health concerns, chairman Michael Astrue assured shareholders that marketing help was still a priority.
Yet so far, nothing. New CEO Fischer has been pretty quiet on the topic, for better or for worse. But the company released some new data this week that should help Qsymia's cause: In a study, the drug cut the annualized incidence rate of Type 2 diabetes for high-risk patients by up to 78%.
- read Vivus' release