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VIVUS Inc.’s (VVUS - Free Report) first quarter 2014 loss (excluding one-time items) of 13 cents per share was much narrower than the Zacks Consensus Estimate of a loss of 34 cents and the year-ago loss of 53 cents.

The company’s total revenues for the first quarter of 2014 came in at $36.7 million as compared to $4.1 million recorded in the year-ago period. The first quarter 2014 revenues included $19.4 million in license and milestone revenue, $7.4 million in supply revenue and $0.8 million royalty revenue related to the erectile dysfunction (ED) drug, Stendra (EU trade name: Spedra). The Zacks Consensus Estimate stood at $12 million for the first quarter of 2014.

Quarter in Details

The company’s weight management drug Qsymia generated net product sales of $4.1 million as compared to $7.7 million recorded in the fourth quarter of 2013. Qsymia prescriptions (approximately 121,000) witnessed a 2.4% sequential decline in the reported quarter. In the first quarter of 2014, 54% of total prescriptions were a free good or on a discount offer. At the first quarter conference call, the company stated it is still looking for partner opportunities for Qsymia.

Apart from Qsymia, the company’s portfolio consists of another product Stendra. Auxilium Pharmaceuticals Inc. has launched the product in the U.S. in Dec 2013, while Menarini launched the drug in the EU in Apr 2014.

VIVUS has licensed Sanofi (SNY - Free Report) for the development and commercializing of the drug in Africa, the Middle East, Turkey, and the Commonwealth of Independent States (CIS) including Russia.

In the first quarter of 2014, research and development expenses were $4.4 million, down 37.2% year over year. Selling, general and administrative expenses were down 36% to $28.6 million.

Our Take

Although VIVUS posted an earnings and revenue beat in the first quarter of 2014, we are concerned about lower Qsymia prescriptions in the quarter.

The competitive nature of the obesity market, given the presence of Belviq among others, keeps us concerned. The successful commercialization of Qsymia is crucial for the financial performance of VIVUS as it can drive the company to profitability. Additionally, we believe it is crucial for the company to find a suitable partner at this juncture which will enable it to realize the full potential of Qsymia.

Meanwhile, Auxilium has submitted a supplemental New Drug Application (sNDA) for Stendra. We believe Stendra’s fast action could help the drug gain share.

VIVUS, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Some better-ranked biopharma stocks, worth considering, include Alexion Pharmaceuticals, Inc. (ALXN - Free Report) with a Zacks Rank #1 (Strong Buy).

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