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UPDATE: Bank of America Downgrades Vivus as Partnering Prospects Weaken


In a report published Tuesday, Bank of America analyst Steve Byrne downgraded the rating on Vivus (NASDAQ: VVUS) from Neutral to Underperform, and lowered the price target from $11.00 to $6.00.

In the report, Bank of America noted, “We lowered our DCF-derived PO to $6 (from $11) and our rating to Underperform (from Neutral) following changes to our model to incorporate lowered expectations that VVUS will be able to secure a quality partner and favorable terms. We continue to believe a partner with broad primary care reach and the budget for DTC advertising is essential to drive an inflection in sales and maximize the potential of Qsymia, but we found management's tone on finding a partner in 2014 to be negative. 4Q13 results of $7.7mn in Qsymia sales were disappointing in our view and illustrate the limited reach of VVUS' 150 rep sales force. We believe VVUS is negotiating from a position of weakness due to flattish script trends in spite of free/discount drug programs (59% of scripts in 4Q). Our peak sales estimate is now $1bn in 2021 (prev. $1.8bn) and still assumes a partnership. The cost of the CVOT (~$200mn) heightens the need for a partner, and weakens VVUS' position.”

Vivus closed on Monday at $6.75.

Latest Ratings for VVUS

Mar 2020Wells FargoMaintainsEqual-Weight
Feb 2016RBC CapitalDowngradesOutperformSector Perform
Nov 2014Bank of AmericaMaintainsUnderperform

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Posted-In: Bank of America Steve ByrneAnalyst Color Downgrades Analyst Ratings

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