VIVUS Scores Successful Up-Sized Stock Offering (VVUS)

VIVUS, Inc. (NASDAQ:VVUS) announced on Tuesday that it was going to raise capital in a shares sale for up to 8.5 million shares.  We had written last week that we expected the company to raise capital any day.  Demand must have been very strong because the stock rose almost 6% on the day to $22.50 per share.  To show that demand strength, VIVUS actually sold 9,000,000 shares of its common stock at $22.50 per share.

All of the shares in this stock offering are being sold by VIVUS. The gross proceeds will be approximately $202.5 million and here is the use of funds:

• (i) to fund the creation of the infrastructure including the hiring of a field sales force and the development and production of promotional materials necessary to commercialize Qnexa in the United States, if approved, for the treatment of obesity;
• (ii) to cover expenses in connection with pursuing non-U.S. marketing approvals for Qnexa and avanafil;
• (iii) to fund new clinical trials for Qnexa and other investigational product candidates;
  (iv) to finance our marketing and awareness efforts for Qnexa;
• (v) to fund the ongoing hiring of additional sales and marketing, regulatory, medical affairs and research and development and other personnel to support Qnexa and our other investigational product candidates;
• (vi) to fund additional investment in information technology infrastructure and product support systems;
• (vii) for third-party contract supply costs;
• (viii) to fund the cost of any post-approval Qnexa requirements, including the cost to complete a cardiovascular outcomes study and any additional studies required for Qnexa; and
• (ix) for general corporate purposes, including working capital. 

J.P. Morgan Securities is the sole book-running manager; co-managers are BofA Merrill Lynch, JMP Securities, Needham & Company, and Rodman & Renshaw.  VIVUS granted the underwriters a 30-day option to purchase up to 1,350,000 additional shares of common stock to cover over-allotments.
 
VIVUS did also note that it may use a portion of the net proceeds to acquire strategic assets, although it currently has no agreements or commitments in this regard.

This looks like a job well done by management.  VIVUS shares closed up 5.8% at $22.50 today and the stock is actually up on the pricing news in the after-hours trading session above $23.00 after peaking at $25.00 earlier this week.

JON C. OGG