Will Vivus’s Stock Price Continue to Shed Weight?

With shares of Vivus (NASDAQ:VVUS) trading at around $11.75, is VVUS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Vivus has been one of the hottest stories on the street over the past two months. However, Vivus hasn’t been one of the hottest stocks. Their anti-obesity drug, Qsymia, was the victim of lofty expectations. On the Q3 conference call, it was stated that only 5,000 prescriptions had been filled. This caused a precipitous drop in the stock price.

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Part of the problem is that Qsymia is only offered through Walgreen (NYSE:WAG) and CVS Caremark Corporation (NYSE:CVS) mail order programs at the moment. Originally, the game plan was to market to physicians, but that plan was abandoned quickly. In order to jumpstart sales, Vivus is now offering a 14-day free trial of Qsymia. This might be a rash decision, but that remains to be seen. One potential problem is that it takes 30 days to see any real results. However, sometimes hope is a powerful weapon. Once those who deal with obesity have a potential cure in their hands, they might want more.

Let’s take a look at some important numbers for Vivus and then determine whether this might be a good entry point.