The Zacks Analyst Blog Highlights: VIVUS, Johnson & Johnson, Arena Pharmaceuticals, Jazz Pharmaceuticals and Yum! Brands
CHICAGO, Sept. 10, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the VIVUS, Inc. (Nasdaq:VVUS-Free Report), Johnson & Johnson (NYSE:JNJ-Free Report), Arena Pharmaceuticals, Inc. (Nasdaq:ARNA-Free Report), Jazz Pharmaceuticals (Nasdaq:JAZZ-Free Report) and Yum! Brands Inc. (NYSE:YUM-Free Report).
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Here are highlights from Monday's Analyst Blog:
VIVUS Gets New CEO
VIVUS, Inc. (Nasdaq:VVUS-Free Report) recently announced that Anthony Zook, who was appointed as the Chief Executive Officer (CEO) of the company in Jul 2013 has resigned due to health concerns. Investors have reacted negatively to the news.
VIVUS appointed Seth H. Z. Fischer as its CEO effective immediately. He will also join the VIVUS Board of Directors. Previously, Fischer served as a senior executive at Johnson & Johnson (NYSE:JNJ-Free Report).
The new CEO has his work cut out for him. The company's lead product, Qsymia, has performed disappointingly since launch in Sep 2012. Qsymia revenues in the second quarter of 2013 were $5.5 million as compared to $4.1 million recorded in the first quarter of 2013.
We remind investors that Qsymia was launched in the U.S. in Sep 2012. The U.S. Food and Drug Administration (FDA) cleared Qsymia in Jul 2012 as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese (Body Mass Index, or BMI - 30 or more) or overweight (BMI - 27 or more) adults suffering from at least one weight-related co-morbid condition.
On Apr 16, 2013, the FDA approved an amendment and modification to the Risk Evaluation and Mitigation Strategy (REMS) of Qsymia. As per the modification to the REMS, Qsymia can now be distributed through certified retail pharmacies apart from the existing certified mail-order pharmacy network. The company announced retail availability on Jul 1, 2013.
We remind investors that apart from Qsymia, another weight-loss drug, Arena Pharmaceuticals, Inc.'s (Nasdaq:ARNA-Free Report) Belviq, received approval in the U.S. last year. Belviq was launched in the U.S. in Jun 2013.
Apart from Qsymia, VIVUS' portfolio consists of another approved product, Stendra, for erectile dysfunction (ED), which received approval in the U.S. in Apr 2012 and in the EU in Jun 2013. The company is looking for a partner in the U.S.
VIVUS, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Biopharma companies that currently look attractive include Jazz Pharmaceuticals (Nasdaq:JAZZ-Free Report) with a Zacks Rank #2 (Buy).
China Weakness Continues for Yum
Louisville, Ky.-based restaurateur Yum! Brands Inc.'s (NYSE:YUM-Free Report) powerhouse China Division's comparable sales (comps) declined again for the month of August. Comps at YUM! dipped 10% due to a 12% fall in the same at its KFC brand. However, the rate of decline moderated from the 13% shortfall reported in July.
Yum!'s Pizza Hut Casual Dining registered 5% growth in China in August, better than the July comps growth of 3%.
Moreover, the company estimated that the third-quarter 2013 China comps dipped 11% owing to a 14% fall in KFC, partially offset by a 4% growth at Pizza Hut. The third quarter, results of which are expected to be released on Oct 8, includes the months of June, July and August.
In Dec 2012, the company's China division – the largest contributor to YUM!'s revenue stream – encountered an allegation regarding the quality of chicken supplied to its KFC restaurants. The negative publicity resulting from this accusation continues to hurt the company's sales results in China. In addition, the outbreak of avian flu in China in early April also dented China Division's performance.
China, which holds the key to YUM!'s overseas expansion plans and has played a pivotal role in Yum!'s solid performance over the last few years, began to post negative comps results since fourth-quarter 2012 due to the above setbacks.
Though the Zacks Rank #3 (Hold) company is witnessing weak sales results for the past few quarters, it is trying hard to recover its business and is expecting to record positive same-store sales in the fourth quarter of 2013.
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