Vivus has been boosted by the news that regulators in the USA have given the green light to the firm's erectile dysfunction drug Stendra.

The US Food and Drug Administration has approved Stendra (avanafil) for ED which affects about 30 million men in the USA. The pill, which is a phosphodiesterase type 5 (PDE5) inhibitor, has been assessed in three Phase III studies involving 1,267 patients over 12 weeks; those on Stendra experienced statistically significant improvement in all three endpoints (erectile function, vaginal penetration and successful intercourse) for all three doses (50mg, 100mg or 200mg).

Victoria Kusiak, deputy director of the Office of Drug Evaluation III in the FDA’s Center for Drug Evaluation and Research, said the approval "expands the available treatment options to men experiencing ED and enables patients, in consultation with their doctor, to choose the most appropriate treatment". The three drugs available at the moment - are all PDE5 inhibitors - Eli Lilly's Cialis (tadalafil), Bayer's Levitra and of course Pfizer's Viagra (sildenafil).

Some serious competition, but one advantage for Vivus could be that Across all the Phase III studies, success was observed in some Stedara-treated patients as early as 15 minutes after dosing, as opposed to 30 minutes for the other drugs. On the other hand, getting market share (which is worth over $5 billion) could be tough given that the patents on Cialis and Levitra expire in 2016 and 2018, respectively, and generic Viagra is expected in 2019.

In an investor note, Simos Simeonidis at Cowen & Co wrote: "Does anyone really need another ED drug? Probably not, but given the large market opportunity and the potentially differentiating faster onset of action, we believe that in the hands of big pharma, Stendra is probably worth around $300 million. He also reminded investors that "management's intent is to outlicense/divest Stendra".

Vivus confirmed that it is "currently in discussion with potential partners to commercialise Stendra", the first new prescription ED drug approved in nearly a decade. The therapy is licensed from Japan's Mitsubishi Tanabe Pharma Corp and is already sold in South Korea by JW Pharma under the brand name Zepeed.

The Stendara approval comes as Vivus waits for final approval from the FDA (on or before July 17) for its obesity drug Qnexa (phentermine/topiramate). The combo received the backing of the agency's Endocrinologic and Metabolic Drugs Advisory Committee in February.

Vivus sale in the offing?

Mr Simeonidis and colleague Yatin Suneja say that Qnexa is a drug "with tangible blockbuster potential that should be in the hands of big pharma; with all its problems and issues, this is the one thing big pharma has always done better than anyone: get primary care docs to prescribe its products". As such, they believe that Vivus management, "which is both competent and sophisticated, should pursue a sale of the company, and they're probably in the process of doing so".