VLI Expects Losses for 1986 to Exceed the $1.4 Million of ’85
VLI Corp., maker of the Today contraceptive sponge, said it expects today to report losses for 1986 that exceed the company’s 1985 net loss of $1.4 million. The company said, however, that it expects its most recent losses to be less than those reported for 1984. And while 1986 revenue should top the record $16.7 million reported for the prior year, Robert Hobbs, VLI’s chief financial officer, said Tuesday that fourth-quarter revenues are expected to be less than the $3.6 million reported a year earlier.
For the last two years, the Irvine-based company has been blaming its quarterly losses largely on the high costs of the advertising program for the Today sponge.
Separately, Hobbs confirmed Tuesday that VLI has encountered delays in completing clinical trials of a medicated sponge that would be used for treatment of vaginal infection. VLI had hoped that it could file for federal approval to market the sponge by the end of 1986. However, the dosages being tested appear to be too low, Hobbs said.
“The dosage levels may not be high enough to effect the cure rate we hoped to achieve,” he said. While VLI may be forced to repeat some trials, further delaying introduction of the product, Hobbs said the company remains optimistic that it can file for Food and Drug Administration approval by early next year.
Profit Expected in ’87
Despite the disappointing 1986 results, Hobbs said VLI expects to report a profit for 1987. The company plans to introduce several new products this year and hopes to win approval to market the sponge in several European countries, Hobbs said.
Although there has been widespread speculation that VLI plans to begin marketing a condom, Hobbs refused to elaborate on new products.
VLI, which last year launched a major advertising campaign for the contraceptive sponge, will scale back that effort this year, Hobbs said. During 1986, marketing and advertising expenses increased 25% to 30% over the $8.9 million VLI spent in 1985.
The heightened media blitz--which included television and radio spots--helped win the Today sponge a 30% share of the market for over-the-counter female contraceptives but did so, Hobbs said in retrospect, at “too high a price.”
