Shares of Vivus Fall +10% Following Piper Jaffray's Downgrade

Shares of VIVUS VVUS respond to Piper Jaffray analyst Charles Duncan's downgrade from Neutral to Underweight and price target decrease to $3.00. Despite an improving anti-obesity market outlook in the U.S., Duncan reported that the macro-dynamics have not translated into gains for Qsymia's prescription and sales trend. The analyst commented on Qsymia's outlook noting three concerns, including "1) current prescription trends; 2) delays in signing a U.S. marketing partner; and 3) an expected Contrave launch in 2H14." Duncan added that IMS trends are underwhelming despite management's efforts. Piper Jaffray noted that although weekly retail data on the price per prescription is trending higher, the trend is "not apparent" in monthly data. The analyst reminded investors that Vibus has not increased Qsymia's price per prescription since September 2013. The analyst remarked on increased execution risk and reduced its revenue projections. Duncan decreased 2014 and 2015 revenue projections from $61 million to $53 million and from $142 million to $107 million, respectively. The analyst is cautious for 2016 and 2017 revenue, predicting $150 million and $249 million, respectively. Piper Jaffray increased the discount rate from 15 percent to 20 percent, which resulted in a lowering the price target from $8.00 to $3.00. Shares of Vivus closed at $6.18 on Wednesday and have traded as low as $5.60, down 10.357 percent.