VIVUS, Inc. (NASDAQ: VVUS) is having a relatively strong start to the trading session this mornig, and for good reason. Early this morning, the company released news surrounding the execution of a strategic vision, involving the acuisition of a product as well as a financing agreement. Of course, the news led to excitement among investors, sending the stock on a run for the top. Today, we’ll talk about:
- The news;
- what we’re seeing from VVUS;
- and what we’ll be watching for with regard to the stock ahead.
VVUS Announces Execution On Strategic Vision
As mentioned above, VIVUS is having a great start to the trading session this morning after announcing that it has executed on a previously announced strategic vision. In a press release issued early this morning, the company announced that it has met the closing conditions related to the acquisition of United States and Canadian rights to PANCREAZE® (pancrelipase) Delayed-Release Capsules. The treatment was designed for patients with exocrine panreatic insufficiency (EPI) and was developed by Janssen Pharmaceuticals. The acquisition came with a cost of $135 million. Also, it was announced that the company completed the financing agreement with Athrium Capital Management, L.P.
In a statement, John Amos, CEO at VVUS, had the following to offer:
The restructuring of a portion of our debt coupled with the acquisition of a cash flow generating asset, PANCREAZE, will move VIVUS towards our goal of becoming an operating profit generating specialty pharmaceutical company. The PANCREAZE transaction fits a well-defined strategy of acquiring assets utilizing VIVUS’ improving operational and financial discipline as a base platform… We expect the addition of PANCREAZE will contribute to revenue beginning in the third quarter of 2018 while leveraging our operating expense base. PANCREAZE exemplifies the types of synergistic assets we seek to acquire. We are excited to close this acquisition and move forward with a company that is designed to serve as a platform to acquire additional assets that we believe will generate significant clinical and commercial value.
The above statement was followed up by Mark Oki, CFO at VVUS. Here’s what he had to offer:
Completing the debt restructuring transaction with Athyrium is an important step toward achieving the goal of a properly levered balance sheet. This restructuring creates the financial flexibility we need to continue acquiring additional cash-flow positive assets that we believe will enhance our product portfolio and revenue potential.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of VIVUS, the news proved to be overwhelmingly positive. When this strategic plan was first announced, the stock soared as investors showed their approval. Now, with the transactions both coming to fruition, it’s no surprise that excited investors are sending the stock upward. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:03), VVIS is trading at $0.88 per share after a gain of $0.023 per share or 2.71% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on VVUS. In particular, we’re interested in following the story surrounding the company’s work with regard to its new ANCREAZE® (pancrelipase) Delayed-Release Capsules product as well as the use of the funding received under the financing agreement that has now been completed. Nonetheless, we’ll continue to follow the story closley and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!