UPDATE: Bank of America Downgrades Vivus to Neutral, Lowers PT on Weaker Partnering Prospects

In a report published Wednesday, Bank of America analyst Steve Byrne downgraded the rating on

from Buy to Neutral, and lowered the price target from $17.00 to $11.00. In the report, Bank of America noted, “We are lowering our rating to Neutral (from Buy) and our PO to $11 (from $17). Paltry sales growth in 3Q and a company now in cost cutting mode add to the challenges of securing a strong partner near-term. We lowered our royalty rate estimate to 20% (from 25%) and our peak revenue estimate to $1.8bn in 2020 (previously $2.3bn). While we continue to like Qsymia's best-in-class efficacy and recognize the potentially large market opportunity, we do not view VVUS' current 150-specialty sales force as equipped to penetrate the large PCP market and we view a strong partner as essential to drive physician awareness. While a strong near-term partnership would bolster our outlook, we could see further downside from a partner with a specialty sales force (vs. primary care).” Vivus closed on Tuesday at $9.41.