Irvine-Based VLI Corp. Pondering New Product

After weeks of Wall Street speculation, VLI Corp. confirmed Thursday that it is considering adding condoms to its product line.

The Irvine-based firm--whose wares include a contraceptive sponge, a personal lubricant and an in-home pregnancy test--said it has held “preliminary discussions” with several unidentified companies aimed at obtaining condoms for sale under the VLI name.

Robert Elliott, VLI’s president, said the company will not make a decision on the proposed condom line for several more weeks.

Gainer in Trading

VLI was the third-biggest gainer in over-the-counter trading Thursday, closing at $5a share, up $1on record volume of more than 1 million shares. Elliott said VLI was contacted early Thursday afternoon by NASDAQ officials seeking an explanation for the unusual trading volume.

As recently as last week, VLI officials declined to comment about widespread speculation that they were exploring the condom business.

Condoms have been gaining in popularity because of the AIDS crisis. The domestic market for condoms totals more than $120 million a year and should grow rapidly because of the attention focused on their ability to prevent the transmission of AIDS, said Jim McCamant, editor of the Medical Technology Stock Letter.

“It certainly makes sense,” McCamant said, noting that VLI already has a well established distribution network for its Today contraceptive sponge. The Today sponge currently enjoys a nearly 30% share of the market for non-prescription female contraceptives.