Can Vivus Inc. Ride Qsymia to Market Success and Big Returns?

Since last week’s news that Vivus, Inc. (NASDAQ:VVUS) received FDA approval for its obesity drug Qsymia, the raging battle between Vivus and Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has now reached a climax point. With both drugs now approved – Arena’s Belviq was approved three weeks ago as the first obesity drug approved this millennium – the race is on to pu7t the drugs in the market commercially first and the analysis of the efficacy of each drug may well determine the success of both company’s stocks.

Arena received an approval boost earlier this month with its news, and now Vivus, Inc., has been riding a bit of a wave of late. And when one looks deeper into the data comparing the two drugs in their respective tests, based on data reported by the FDA, Vivus may have the edge on Arena due to its drug being considered more effective than its rival. Of course, much of the pharmaceutical industry is based on marketing and messaging – which may determine success more than the drugs.

While the data is securely in favor of Vivus, Inc., and Qsymia, some analysts (like this one from just last week, the day after Qsymia was approved) seem to think the long-term health of Arena Pharmaceuticals may end up being a better long-term buy (to be fair, though, this analysis counters Citron’s concerns mentioned above).  However, it seems in the short-term, and if Vivus, Inc., can win the marketing battle for market share, that Vivus may be in position to come out ahead.

Vivus, Inc., stock has been all over the place, and the love-hate relationship with hedge funds has been prounced. For example, at the end of March, John Burbank’s Passport Capital had a $165 million investment in Vivus stock, while Richard Chilton’s Chilton Investment Company was in for $64.3 million. However, during the first quarter of 2012, Passport raised its share position by 72 percent, while Chilton sold 67 percent of its holdings.

In Tuesday’s trading day, VVUS closed at just less than $23 a share, up nearly 2.7 percent on the day. The stock has a market cap of $2.3 billion and a daily volume of 10 million shares.