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Passport’s John Burbank Boosts VIVUS Stake to 8.5 Pct of Company

November 02, 2012 | About:
Holly LaFon

Holly LaFon

255 followers
John Burbank’s hedge fund Passport Capital has picked up 416,329 shares of VIVUS (VVUS), according to GuruFocus Real Time Picks, which increases the size of his holding by 5 percent. After the purchase, he holds a total of 8,552,929 shares, giving him 8.5 percent ownership of the company.

VIVUS develops new biopharmaceutical treatments for obesity, diabetes, sleep apnea and sexual health. It currently has two standout drugs: Qsymia, the first new medication for the treatment of obesity available in 13 years, and Stendra, for the treatment of erectile dysfunction.

Qsymia was FDA approved on July 17, 2012 and introduced to the U.S. market on Sept. 18, 2012, and Stendra received FDA approval on April 27, 2012.

On Oct. 18, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human use (CHMP) recommended against VIVUS’s Marketing Authorization Application (MAA) for Qsiva in the EU (Qsiva is the brand name for Qsymia in the EU). The committee had concerns about the drug’s potential affect on the cardiovascular system and nervous system after long-term use, as well as teratogenic potential and use by patients Qsiva is not intended for.

Once the company receives regulatory approval for Qsiva and Spendra in the EU and other countries, it will be poised to enter into collaboration agreements for the commercialization of the drugs in the EU and worldwide, and develop other drugs.

In the second quarter ended June 30, VIVUS reported a net loss of $24 million, or $0.24 per share, compared to a net loss of $16.2 million, or $0.20 per share in the second quarter the previous year. Net losses increased primarily due to greater expenses for preparation for the launch of Qsymia.

VIVUS at quarter-end had cash of $310.4 million, compared to $145.8 million at year-end 2011, with the increase primarily coming from the $192 million net proceeds it gained in a public stock offering in March. VIVUS has primarily financed itself through issuing equity securities since its inception.

Year to date, VIVUS’s stock has increased 48 percent. The company has a market cap of $1.45 billion, a P/B ratio of 5.7, close to a one-year low, and a P/S ratio of 35.2, close to its one-year low of 35.2.

VIVUS is Burbank’s largest long equity position, followed by Cytec Industries (CYT), Liberty Interactive Corp. (LINTA), Marathon Petroleum Corp. (MPC) and Kinder Morgan Inc. (KMI).

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