VIVUS TARGETS VIAGRA-AVERSE TO REBUILD SHARE

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how potent was Viagra in its first year? Strong enough to give a small, once profitable company a massive reversal of fortune.

Vivus, which makes a urethral suppository called Muse, has been so hurt financially that it claims it has no money left for a direct-to-consumer advertising campaign.

That's a far cry from two years ago, when the company struggled to keep up with demand. Muse debuted in January 1997, becoming the first non-injectable treatment for erectile dysfunction.

Shortly afterward, urologists and other physicians were writing some 17,000 prescriptions a week. The company's stock price climbed; Vivus ended 1997 with $37 million in profits on $129 million in sales.

TRYING TO HOLD MOMENTUM

To keep its momentum -- and in anticipation of the onslaught expected from Pfizer's Viagra -- Vivus ramped up its sales force from 50 representatives to 200. It also launched a $4 million national TV and print DTC ad campaign.

But the effort failed on at least one front, when a commercial to air during the 1998 Super Bowl was turned down by NBC because its content -- text only, with no product shots -- was deemed inappropriate. Hoffman/Lewis, San Francisco, created the entire DTC effort.

Nearly three months after the Super Bowl, in April 1998, Viagra hit the market.

Vivus started reeling. Prescriptions for Muse dropped to 3,000 a week. The ad budget was axed completely. The marketing staff dwindled to two.

Last June, the company began a restructuring plan that resulted in a drop in employees from 800 to about 100.

The company's stock price plummeted from a peak of $40 a share to $2, and Vivus lost $80 million.

The company claims it was hurt by the huge surge in media attention that gave Viagra pop culture status and portrayed the drug as a godsend.

INFLUENCE OF MEDIA BUZZ

Leland Wilson, Vivus' CEO, said the publicity shifted much of the treatment for erectile difficulties away from urologists and into the hands of primary-care physicians. Those doctors may not understand the condition as intricately and may be more influenced by a media buzz, he added.

"The decisionmaking process went away from the physicians in general to consumers," he said. "It became much like an over-the-counter market."

Pfizer spent $21.4 million in 1998 advertising Viagra, according to Competitive Media Reporting.

PATIENTS BYPASS EXPERTS

Mr. Wilson said Vivus wasn't completely blindsided by Viagra -- the company knew a pill would be a more appealing treatment than Muse's local application. But it was struck by how little urologists who understood Viagra's disadvantages and Muse's advantages were consulted by patients.

Now, without any money for a DTC push and realizing Viagra is here to stay, Vivus is trying to reach more urologists and high-Viagra-prescribing physicians to convince them it offers a viable alternative.

Besides posing a reduced risk, Vivus claims Muse begins working immediately after the product is used while Viagra can take an hour or longer.

Mr. Wilson said Vivus wants to establish its "play pen," or niche, in the booming market. Some 10 million to 30 million men suffer from erectile dysfunction, and he estimated the treatment market generates about $1 billion annually in sales. That figure could grow to $3 billion to $5 billion annually, Mr. Wilson added.

Still, Mr. Wilson is convinced Vivus can grab a part of that market. To do so, the company will use its now-six-member sales staff to take its marketing message both to urologists and to other physicians.

Next month, it plans a marketing push at the American Urological Association's annual meeting in Dallas.

'VIAGRA FAILURES'

Vivus wants to attract what it calls "Viagra failures" -- a broad term it uses to encompass men at risk with Viagra and the 30% or more of men who don't benefit from the drug.

A new Muse brochure reads: "Another meaning for the phrase safe sex."

The company also holds out the possibility of a white knight. Since June, Vivus has been in negotiations with several unidentified blue-chip drug companies

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