Vivus Preps a New ED Drug Just as the Market Is Set to Implode

(MoneyWatch)  Vivus (VVUS)'s stock rose on news that a phase 3 study showed its new erectile dysfunction drug, avanafil, produced "erections sufficient for intercourse" 80 percent of the time. So far, so good. But the devil is in the details with this drug.

Look closely at the results charts in Vivus' press release. Even at the highest dose, only 57 percent of patients "experienced successful intercourse." This chart gives stats for that measure, per Vivus: Doesn't 57 percent seem a little low? Not compared to the baseline scores, of 12 - 14 percent. The numbers are rather squishy, because they're based on a self-administered diary-questionnaire, "the Sexual Encounter Profile." What is SEP? According to MedScape:

... the Sexual Encounter Profile (SEP), [is] a diary consisting of yes/no-type questions that enables both the patient and his partner to evaluate sexual encounters.

For example, questions 2 and 3 of the SEP read, respectively, "Were you able to insert your penis into your partner's vagina? [yes/no]" and "Did your erection last long enough for you to have successful intercourse? [yes/no]."

So even on the highest dose of avanafil, 43 percent of patients couldn't keep it up even during sex. You can judge for yourself how reliable self-reported failure is among men, even when anonymous.

Add to that the fact that Pfizer (PFE)'s Viagra goes off patent in 2012, which will devastate the category, forcing steep discounts and lost revenue for Bayer (BAY)'s Levitra and Eli Lilly (LLY)'s Cialis alike.

Put the two factors together. Who, exactly, is going to want the new, branded, expensive version that Vivus will be marketing at that time?