VVUS – Vivus, Inc. – The biopharmaceutical company attracted a number of bearish options investors in the first half of the trading day with the price of its shares lower by 1.45% to $9.54 as of 12:50 pm (ET). The bearish strategies employed on Vivus today are perhaps the work of investors bracing for share price erosion if the firm’s obesity drug, Qnexa, fails to garner approval from the Food and Drug Administration. The FDA is slated to release a preliminary report of its findings on July 13, 2010, ahead of its final decision scheduled for October 28, 2010. One investor purchased a ratio put spread in the July contract, which will yield significant profits if shares of the biopharmaceutical company fall ahead of July expiration. The trader is perhaps hedging the possibility of a less-than stellar preliminary report in July, which would likely send VVUS shares reeling. The options strategist purchased 2,500 puts at the July $9.0 strike at an average premium of $2.42 each, and sold 5,000 puts at the lower July $5.0 strike for a premium of $0.45 apiece. The net cost of the bearish play amounts to $1.52 per contract, thus positioning the investor to make money if Vivus’s shares decline 21.6% from the current price to breach the average breakeven point on the spread at $7.48 by July expiration day. The trader walks away with maximum potential profits of $2.48 per contract if VVUS shares plummet 58% to settle at $4.00 at expiration. Another pessimist initiated a longer-term bearish bet on VVUS by purchasing a 2,000-lot plain-vanilla debit put spread at the September $9.0/$4.0 strikes at a net cost of $2.50 per contract. The transaction yields maximum potential profits of $2.50 per contract if shares fall 58% to trade at or below $4.00 by expiration day in September. Options implied volatility on Vivus is up 7.2% to 263.98% as of 1:05 pm (ET).