VIVE: FDA Warning Letter Should Weed-Out Imposters and Benefit VIVE

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By Brian Marckx, CFA

NASDAQ:VIVE

READ THE FULL VIVE RESEARCH REPORT

On July 30th FDA issued a Safety Communications letter warning against the use of “Energy-Based Devices to Perform Vaginal ‘Rejuvenation’ of Vaginal Cosmetic Procedures”. The purpose of the letter is to “alert patients and health care providers that the use of energy-based devices to perform vaginal “rejuvenation,” cosmetic vaginal procedures, or non-surgical vaginal procedures to treat symptoms related to menopause, urinary incontinence, or sexual function may be associated with serious adverse events. The safety and effectiveness of energy-based devices for treatment of these conditions has not been established.”

FDA notes that they are aware of certain device manufacturers that may be marketing for these purposes – none of which are approved for those indications. FDA warns that if these devices are used for ‘vaginal rejuvenation’ (which includes vaginal laxity/sexual function) that they could cause vaginal burns, scarring, pain during intercourse, and recurring/chronic pain.

FDA has contacted those manufacturers that they believe may be marketing for these unapproved indications and notes that they will be monitoring claims about uses of their products. The manufacturers have 30 days to respond to FDA requests for;

‣ FDA clearance or approval number for the [name of device] for the additional claims referenced above [i.e. vaginal rejuvenation/sexual function/vaginal laxity or related to]

‣ The basis for your determination of whether or not you are required to obtain FDA clearance or approval for the [name of device] for the additional claims referenced above

FDA’s letters to each of the manufacturers can be found here. The following are the companies that FDA contacted – importantly, Viveve (NASDAQ:VIVE) was not one of them;

Manufacturers contacted by FDA for inappropriately marketing their products related to vaginal rejuvenation/sexual function/vaginal laxity/urinary incontinence:

View Exhibit I

Besides warning providers and women not to use energy-based devices for the unapproved uses related to vaginal rejuvenation, it essentially puts manufacturers on notice that FDA is watching and that they need to cease and desist with any off-label marketing for these uses. While off-label use of medical devices (and drugs) is generally allowed and based on the providers’ discretion, off-label marketing is not. This inappropriate marketing by manufacturers of energy-based devices for sexual function/vaginal laxity/rejuvenation/SUI has long been a major impetus to VIVE’s focus on obtaining FDA approval for these indications (specifically, sexual function and SUI) as it would draw a clear and distinct line between the proven benefits (and safety) of the Viveve System and all the rest. This warning letter should almost certainly benefit VIVE in this regard as ‘all of the rest’ do not have FDA approval for those indications and VIVE is (by far) the furthest along towards obtaining marketing approval.

Viveve was not contacted by FDA regarding this. The Viveve System has also been evaluated in several human clinical studies in for both sexual function and SUI indications. It completed three human clinical studies (and recently began a fourth) related to sexual function/vaginal laxity, including VIVEVE I (multi-site U.S./Canada, RCT, n=174), which was used as support for their IDE application for VIVEVE II. VIVEVE II (multi-site, RCT, n=250) is expected to be (assuming positive results) the pivotal study that supports an eventual FDA filing seeking improvement in sexual function. Viveve received FDA IDE approval to conduct the study in March of this year – IDE approval inherently means that FDA believes any safety risks of using the Viveve System for vaginal procedures in this study are acceptable. Moreover, IDE approval was a fairly drawn-out process in which FDA, at several points, asked VIVE to provide additional information regarding safety.

Of note is that the FDA required VIVEVE II to use a staged roll-in enrollment approach to further ensure safety. While total enrollment is expected to be 250, this staged roll-in requirement limits initial enrollment to just 50 patients, at least of 25 of which will need to be treated and assessed for safety purposes (one-month following treatment) before enrollment can be increased. VIVE submitted data on the first 38 patients in early July. At 50, VIVE will then need to submit an IDE supplement, approval of which will be required in order to expand to the intended n=250.

The Viveve System has also completed two human studies in SUI, with a third currently ongoing (VIVE announced positive 6-month results of this study in June). VIVE expects to submit an IDE to FDA for approval of a large (n=200), multi-site, RCT in SUI in the very near-term. They are also seeking Health Canada approval to conduct a similarly-designed study in that country.

The point here is that, it’s clear that FDA is concerned about safety of energy-based devices used in vaginal aesthetic procedures and SUI and that, unlike some manufacturers, VIVE is following the appropriate path to be able to (legally) market their device for the indications that they are targeting. By contrast, some other devices have little or no formal human clinical study experience and therefore no verified safety record. Viveve’s does – and the FDA would not have approved their IDE had they had overwhelming concerns about risk.

So, while we acknowledge that the headline reaction from FDA’s warning letter may be a short-term headwind to VIVE (and a much more significant defeat for the other manufacturers), we think it is also a significant win for the company as it should weed out what are essentially the imposters (i.e. those with little to no formal clinical evidence supporting efficacy/safety in these indications). Further, we think FDA approval of the anticipated IDE supplement for VIVEVE II (as well as the separate IDE application for SUI), if that happens, would provide even more validation of the substantive separation between the Viveve System and all other energy-based devices.

We think any short-term headwinds will be at least equally (and quite possibly, more than) offset by the longer-term benefits from FDA’s warning letter and are maintaining our $7.75/share price target.

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