Vivus Inc is a pharmaceutical company that is currently in phase 3 trial of a new weight loss drug. The results of the studies done so far are encouraging and everybody knows that a pill for weight loss is a gold mine. If it works as well as they are touting a few people may get very rich as the BMI of America decreases.
At the moment Vivus stock (VVUS) is up 16% in morning trading. That's not to be unexpected and it gives me a lot of hope. It confirms to me that there are still a lot of stupid speculative investors out there. For one thing the new drug that Vivus is marketing is nothing more than phenteramine and topiramate. Both of those drugs have been on the market for a while. If this new drug does become something of a money pipeline it will be for one of the big pharma companies after the rights are purchased from Vivus. Will Vivus make money off the deal? Sure they will, but not enough to cover the losses they have had over the past 9 years. The last time Vivus declared a profit for their shareholders was 2000. In the 9 years since then Vivus has had a combined net loss just shy of $100 million.
Even if this new drug is all it says it is, it will be years before it becomes profitable, once again for another company. If it does work we're all just going to be prescribing the equal doses of phenteramine and topiramate that will both be generic by the time this new wonder drug is approved for release by the FDA.
As long as there idiots out there throwing money at companies like Vivus there are deals to be found for long term investors. Certainly a great boost to the efficient market theory (don't even get me started on that).
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