Viveve Receives FDA Approval to Begin Phase 2 Trial, Share Price Decreases

The last several days have been busy for medical device company Viveve Medical (NASDAQ:VIVE), although that may not be reflected in its share price.  

The medical technology company announced on Monday (March 19) that the US Food and Drug Administration (FDA) approved an application for it to conduct a Phase 2 clinical trial. The company’s Phase 2 trial with the investigational device exemption is now able to assess the safety of a vaginal introitus treatment.

“The initiation of this study, which is expected to occur in the second quarter of 2018, underscores our continued commitment to conducting high-quality, scientific and clinical research,” Patricia Scheller, CEO and director of Viveve said in the release. “Viveve has worked closely with the FDA in the review process and appreciates the thorough review that the Agency has conducted.”

The indication for the device is to improve the sexual function in women following vaginal childbirth. The study will take place at up to 25 study sites in the US and Canada with about 250 patients. The press released said the study will include a variety of secondary and exploratory endpoints and patients will be assessed for 12 months.

Prior to that, Viveve announced on March 15 positive 2017 financial results, highlighting a record performance with 114 percent increase from $7.14 million to $15.39 million.

Viveve’s 2017 financial results also showed operating expenses, research and development, and net loss nearly doubled from 2016. The company projects $22 to $24 million in revenue for 2018. If the projection is true it will give the company at least a $7 million boost in revenue from 2017.

“With the sale of 227 systems in 2017, Viveve now has a commercial installed base of 444 systems worldwide. We anticipate continued momentum in system sales and consumable utilization in 2018 as we advance our global commercial strategy,” Scott Durbin, Viveve’s CFO said in the press release.

Investor takeaway

Despite the company’s FDA approval positive 2017 financial results, Viveve’s share price has been on a 13.55 percent decline in the past week to close at $3.70 on Wednesday (March 21).

Over the course of that period, two analysts have reiterated “buy” ratings for the company. Maxim Group analyst Anthony Vendetti gave the company a price target of $11.00, attributing it to the positive financial results.

Analyst Difei Yang with Mizuho Securities gave Viveve a price target of $10.00 stating, “We expect the trends in utilization and pricing to continue in 2018,” in his report.

This drop on the share price reminds investors how unpredictable and risky the healthcare industry can be at times. Viveve’s share price will likely not stay down for long as the company predicts another successful year ahead.

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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.