Jefferies Comments on VIVUS' Qnexa Ahead of FDA Approval

Jefferies & Company has published a research report on VIVUS VVUS commenting on the company's Qnexa approval ahead the July 17 decision by the FDA. In the report, Jefferies wrote, "We consider heart rate (HR) elevations to be the remaining critical issue for Qnexa approval by July 17. Bulls argue the complete response letter did not specifically request a cardiovascular (CV) outcomes study and point to the 20-2 vote at the February Qnexa advisory panel and favorable commentary from panelists on relegating CV testing to post-approval. Furthermore, bulls have cited recent FDA commentary that another obesity drug is in the process of designing [post-approval] CV studies, which bulls interpret positively to be referring to Qnexa. Bulls also argue that if the FDA requires pre-approval risk assessment, VVUS could exclude harm prior to approval with the non-adjudicated MACE in its clinical program, as was done for the diabetes drug Victoza and Arena's (ARNA, $10.61, Buy) Belviq." Jefferies maintained its Underperform rating and $9 price target on VIVUS, which closed yesterday at $27.73.