Boston, MA 02/25/2014 (wallstreetpr) – VIVUS, Inc. (NASDAQ:VVUS) is receiving ratings and stock price target downgrades left, right and center after it posted widely unpopular results for fiscal 2013 fourth quarter and full-year. Besides the weak financial results that the biotech unveiled, analysts are also raising questions about the prospects of partnering, a key area on which the company’s growth plans are hinged.
Analysts at Bank of America Corp (NYSE:BAC) are the latest to fire warning shots regarding the future prospects of VIVUS, Inc. (NASDAQ:VVUS). The analysts have downgraded the stock of VVUS to “underperform” from “neutral” rating in the previous sentiment. As if that was not enough, BAC analysts went ahead to chop their price objective on the stock of VVUS. So then, they have $6 instead of $11 that existed in the earlier view.
Downgrade Justification
If anyone might think that analysts are being too hard on VIVUS, Inc. (NASDAQ:VVUS), note they are not shying away from giving reasons for their actions. Bank of America Corp (NYSE:BAC) for instance cites that poor product awareness, and dwindling hopes for quality partnership terms.
While analysts at BAC have trimmed their view on VVUS, analysts at Needham & Company weighed with a “hold” rating, meaning a restatement of their earlier observation.
The source of the problem
VIVUS, Inc. (NASDAQ:VVUS) recently declared earnings which showed that its fourth quarter net product revenue was $9.2 million, out of which $7.7 million came from the sale of Qsymia. The net product revenue in the sale of Qsymia in 2012 was $2 million. In the fiscal 2013 fourth quarter, VVUS suffered a loss of $17.2 million, reflecting 17 cents per share. That compared with loss of $56.7 million or 56 cents per share in the fourth quarter of 2012.
It was possible for VIVUS, Inc. (NASDAQ:VVUS) to trim its net loss in the latest quarter due to the revenue it realized from the commercialization of license agreements related to SPEDRA and STENDRA. Nonetheless, that gain was cancelled by higher expenses and non-recurrent charges.
Ending the year on sour note
As of the full-year 2013, VIVUS, Inc. (NASDAQ:VVUS) generated net product revenue of $25.2 million, about $23.7 million of that amount came from the sale of Qsymia. For the year, the company registered net loss of $174.5 million, reflecting $1.72 cents per share. That compared with net loss of $139.9 million or $1.42 per share noted in 2012. The company stated that the higher net loss was due to the higher expenses related to the sale and administrative expenses for the commercialization of Qsymia. Other one-time charges also weighed in heavily.
