Ventrus is a development stage specialty pharmaceutical company focused on the development of late-stage prescription drugs for gastrointestinal disorders. Our lead products are: Iferanserin (VEN 309) for the topical treatment of hemorrhoids, for which the first Phase III clinical trial began in August 2011 and is ongoing, and topical Diltiazem for the treatment of anal fissures for which the first Phase III trial was initiated November 2010, and is ongoing. Our product candidate portfolio also includes topical phenylephrine intended to treat fecal incontinence (VEN 308). VEN-307 and VEN-308 are two molecules that were previously approved and marketed for other indications and that have been formulated into our in-licensed proprietary topical treatments for these new gastrointestinal indications, and VEN 309 is a New Chemical Entity (NCE).

1. Ventrus Biosciences Inc (VTUS)
®
EARNINGS UPDATE Michael G. King, Jr.
212-430-1794
mking@rodm.com
LIFE SCIENCES
November 14, 2011 Market Outperform / Aggressive Risk
VTUS 3Q11: Modest Push-Out For VEN 309 Top-Line Data, Compelling VEN 309 Market
Assessment Results
MARKET DATA Intraday - 11/14/2011 This morning, Ventrus Biosciences (VTUS, Market Outperform)
Price $8.20 reported its 3Q11 earnings. VTUS reported an EPS of ($0.50), above
Exchange NASDAQ our estimate of ($0.61), on $0mm in revenue. Total operating expenses
Target Price $25.00 of $5.6mm were lower than our estimate of $7.5mm. Specifically, R&D
52 Wk Hi - Low $21.00 - $5.75 expenses of $3.7mm were below our estimate of $5.5mm and SG&A
Market Cap(MM) $101.7 expenses of $1.9mm were in-line with our $2.0mm estimate. VTUS
EV(MM) $91.2 completed 3Q11 with $53.3mm in cash and cash equivalents with no
Shares Out (MM) 12.4 debt. The company stated it believes this will be sufficient to fund
Avg. Daily Vol 33,529 operating expenses and capital expenditures into 2014.
Short Interest 52,389
BALANCE SHEET METRICS Modest push-out in top-line milestone for VEN 309, VEN 307 still
Cash (MM) $14.6 tracking. VTUS provided an update for the timing of top-line results for
LTD (MM) $0.0 its pivotal Phase III trials of iferanserin (VEN 309) for hemorrhoids, as
Total Debt/Capital NA well as diltiazem (VEN 307) for anal fissures. VTUS extended the timing
Cash/Share $2.16
to report the top-line results for VEN 309 by approximately three months
Book Value(MM) NA
Book Value/Share $4.21
(to June 2012), while the top-line results for VEN 307 are still expected
around May 2012. According to the company, the projected NDA filings
EARNINGS DATA ($) for both products remain on track (please see Table 1 on page 2) and
FY - Dec 2010A 2011E 2012E the new completion timelines for VEN 309 should have no effect on the
Q1 (Mar) -- (0.38) -- balance sheet. Further, our expectations for regulatory filing and market
Q2 (Jun) -- (0.97) -- launch remain unchanged. On the call, the company stated that it would
Q3 (Sep) -- (0.50) -- make the market assessment data available in abstract form at the 2012
Q4 (Dec) -- (0.60) -- Digestive Disease Week (DDW) conference.
Full Year EPS (2.13) (1.69) (1.88)
Revenue (MM) 0.0 0.0 0.0
Data from a 10,000 consumer survey are compelling and validates
large market potential for VEN 309. Also on the call, VTUS released
VALUATION METRICS
initial findings from a landmark omnibus survey of consumers and
Price/Earnings NM NM NM patients performed by Princeton Brand Econometrics (Private). Initial
EV/Revenue results showed that the hemorrhoid market is large, patients are seeking
Y/Y EPS Growth 108.8% NM 11.2%
treatment options and the response to the VEN 309 product concept was
very favorable. We refer our readers to the section on page 2 of this
INDICES
report for more detailed findings of the survey and how they support the
DJIA 12,106.6 value proposition of VEN 309.
SP-500 1,253.7
NASDAQ 2,343.6
NBI 981.0 VTUS expects to close the acquisition of the global rights and title
1 Year Price History
for VEN 309 today. VTUS expects to acquire VEN 309’s global rights
and title from the licensor, Sam Amer and Company (Private), today as
25
20 the major conditions (not disclosed) required for the close have been
15
10
met. Given what has been learned about the commercial potential of
5
0
VEN 309, the solid progress of the Phase III program, the straightforward
Q3
2011
Q1 Q2 Q3
2012 regulatory pathway, the potential market and data exclusivity, we believe
this transaction will considerably enhance the value of this asset to
0.8
0.6
0.4
0.2 VTUS.
0
Created by BlueMatrix
We reiterate our Market Outperform rating and $25 Price Target on
VTUS shares. We reach our price target via a discounted EPS model
that includes 2017 royalty revenues of $90 million to yield a diluted EPS
forecast of $4.27. We apply a 35% discount rate in reflection of the
current risk profile and a 35x multiplier as a conservative rate to account
for the growth during that period to reach our $25.00 price target.
For definitions and the distribution of analyst ratings, and other disclosures, please refer to pages 5 - 6 of this report.

2. Ventrus Biosciences Inc November 14, 2011
VEN 309 market research results are compelling and enhance the value proposition of VEN 309.
Survey data collected from 10,202 adult consumers and patients revealed that 1,125 patients reported
having hemorrhoids within the last two years. This represents approximately 11% of the US adult
population (18+ years), which translates into 25.8 million potential VEN 309 candidates from the pool of
234 million adults in the US (2010 population estimate). In addition to the 11% two year prevalence, 9%,
6% and 3% of survey respondents reported having hemorrhoids within the past one year (21.7 million
people), one month (14 million people) and on the day of survey (6.7 million people) respectively. In our
view, these numbers validate the significant market potential for VEN 309. Of the entire group of
hemorrhoid patients surveyed, 85% reported having received treatment and, from those seeking
treatment, 86% of respondent reported using an over-the-counter (OTC) product such as Preparation H
while 14% reported using prescription products as their last treatment. Of all hemorrhoid patients
surveyed, 10% reported having an invasive procedure at some point, of which 61% had surgery; 75% of
patients who had had an invasive procedure reported a recurrence.
When presented with the product concept of VEN 309, 75% of the 1,125 hemorrhoid patients surveyed
stated they would request a VEN 309 prescription at their next physician visit. Of note, the PBE factored
modeling calculates that 25% of this large population would actually request the prescription based on
industry standard promotional levels. For those patients surveyed who were experiencing hemorrhoids on
the day of the survey, an impressive 88% stated they would request a prescription. The PBE factoring
model calculates that 80% would actually make the request for a VEN 309 prescription. Importantly, the
survey also showed that 66% of patients receiving a prescription for VEN 309 would fill that prescription
assuming it carried a $35 out-of-pocket patient co-pay. In addition, 78% of patients with a household
income above $50,000 per year (the median US household income) would fill the prescription at a $35
co-pay.
Taken together, we believe the results of this robust survey are impressive and highlight the substantial
market opportunity for VEN 309, the first potential prescription product for the treatment of hemorrhoids.
On this morning’s call, VTUS noted there are additional data to be analyzed and disclosed at a later date.
We believe these data will further illustrate the market potential for VEN 309 and provide additional
evidence for its value proposition.
Table 1: Key Upcoming Milestones
Key Event Timing
Additional results from VEN 309 market research 4Q11
Publication of German VEN 309 Phase III study 4Q11/1Q12
Progress update on VEN 307 extended release formulation 4Q11
Completion of Phase III trial enrollment for VEN 309 and VEN 307 1Q12
VEN 309 recurrence data read-outs from first Phase III pivotal trial 2Q12
Launch of second VEN 309 pivotal and recurrence trial 2Q12
Launch of second VEN 307 pivotal trial 2Q12
VEN 309 Phase III top-line results June, 2012
VEN 307 Phase III top-line results May, 2012
VEN 307 NDA submission 2013
VEN 307 approval 2014
VEN 309 NDA submission 4Q14
VEN 309 approval 2015
RODMAN & RENSHAW EQUITY RESEARCH 2

3. Ventrus Biosciences Inc November 14, 2011
Figure 1: VTUS 3Q11 Estimates Versus Reported Numbers
US$000s 3Q11 R&R Estimate 3Q11 Actual 3Q11 Consensus
Total Revenues 0 0 0
Operating Expenses
Research and development 5,500 3,700 5,800
General and administrative 2,000 1,900 2,200
Operating Income (loss) (7,500) (5,600) (8,000)
Other Income (Expense)
Interest income 0 0 0
Interest expense 0 0 0
Net Income (loss) (7,500) (5,800) (6,000)
EPS (0.61) (0.50) (0.47)
RODMAN & RENSHAW EQUITY RESEARCH 3

4. Ventrus Biosciences Inc November 14, 2011
Ventrus Biosciences, Inc. Michael G. King, Jr.
Income Statement ($M) Managing Director
Senior Biotechnology Analyst
212-430-1794, mking@rodm.com
Actual Estimated
Fiscal Period: 2010 Q111 Q211 Q311 Q411 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenues $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $61.4 $189.9 $397.9 $639.9 $729.3
Operating expenses:
Research and development $1.9 $1.0 $3.1 $3.7 $6.3 $14.0 $15.0 $18.0 $18.0 $7.5 $3.0 $1.0 $1.0 $1.0
General and administrative $2.9 $1.7 $3.8 $1.9 $2.0 $9.4 $14.1 $16.2 $18.6 $21.4 $24.6 $28.3 $32.5 $37.4
Loss from operations ($4.8) ($2.7) ($6.9) ($5.5) ($8.3) ($23.4) ($29.1) ($34.2) ($36.6) ($15.1) $15.1 $60.2 $110.4 $125.7
Interest income $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Interest expense ($10.5) ($0.1) ($0.0) $0.0 $0.0 ($0.1) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Taxes $33.7 $44.0
Net loss ($15.3) ($2.7) ($6.9) ($5.5) ($8.3) ($23.5) ($29.1) ($34.2) ($36.6) ($15.1) $15.1 $60.2 $76.8 $81.7
EPS, basic ($2.13) ($0.38) ($0.97) ($0.45) ($0.67) ($2.41) ($2.03) ($2.27) ($2.14) ($0.84) $0.80 $3.04 $3.69 $3.74
EPS, diluted ($1.65) ($0.29) ($0.75) ($0.38) ($0.57) ($1.98) ($1.77) ($1.99) ($1.90) ($0.75) $0.72 $2.75 $3.35 $3.41
Shares outstanding, basic 7.187 7.148 7.176 12.361 12.371 9.764 14.323 15.039 17.124 17.980 18.879 19.823 20.815 21.855
Shares outstanding, diluted 9.287 9.248 9.276 14.461 14.471 11.864 16.423 17.139 19.224 20.080 20.979 21.923 22.915 23.955
Source: Ventrus Biosciences and Rodman & Renshaw estimates
RODMAN & RENSHAW EQUITY RESEARCH 4

5. Ventrus Biosciences Inc November 14, 2011
RODMAN & RENSHAW RATING SYSTEM: Rodman & Renshaw employs a three tier rating system for evaluating both the potential
return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a
RELATIVE basis of other companies in the same sector, as defined by First Call. The price objective is calculated to estimate the potential
movement in price a given equity could achieve given certain targets are met over a defined time horizon. Price objectives are subject to
exogenous factors including industry events and market volatility. The risk assessment evaluates the company specific risk and accounts
for the following factors, maturity of market, maturity of technology, maturity of firm, cash utilization, and valuation considerations.
Potential factors contributing to risk: relatively undefined market, new technologies, immature firm, high cash burn rates, intrinsic value
weighted toward future earnings or events.
RETURN ASSESSMENT
●
Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the
common stock of companies within the same sector, as defined by First Call.
●
Market Perform (Hold): The common stock of the company is expected to mimic the performance of a passive index comprised
of all the common stock of companies within the same sector, as defined by First Call.
●
Market Underperform (Sell): The common stock of the company is expected to underperform a passive index comprised of all
the common stock of companies within the same sector, as defined by First Call.
RISK ASSESSMENT
●
Speculative - The common stock risk level is significantly greater than market risk. The stock price of these equities is
exceptionally volatile.
●
Aggressive - The common stock risk level is materially higher than market level risk. The stock price is typically more volatile
than the general market.
●
Moderate - The common stock is moderately risky, or equivalent to stock market risk. The stock price volatility is typically in-line
with movements in the general market.
Rating and Price Target History for: Ventrus Biosciences Inc (VTUS) as of 11-11-2011
02/02/11 05/03/11
I:MO:$12 MO:$25
25
20
15
10
5
0
Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3
2009 2010 2011 2012
Created by BlueMatrix
RATING SUMMARY
Distribution of Ratings Table
IB Serv./Past 12 Mos
Rating Count Percent Count Percent
Market Outperform(MO) 116 65.90% 29 25.00%
Market Perform(MP) 37 21.00% 5 13.51%
Market Underperform(MU) 4 2.30% 0 0.00%
Under Review(UR) 19 10.80% 3 15.79%
Total 176 100% 37 100%
RODMAN & RENSHAW EQUITY RESEARCH 5

6. Ventrus Biosciences Inc November 14, 2011
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of
securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its
affiliates or subsidiaries within the past 12 months.
ADDITIONAL DISCLOSURES
Rodman & Renshaw, LLC. (the "Firm") is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
ANALYST CERTIFICATION
I, Michael G. King, Jr., hereby certify that the views expressed in this research report accurately reflect my personal views about the
subject company(ies) and its (their) securities.
None of the research analysts or the research analyst's household has a financial interest in the securities of Ventrus Biosciences Inc
(including, without limitation, any option, right, warrant, future, long or short position).
As of Oct 31 2011 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Ventrus
Biosciences Inc.
Neither the research analyst nor the Firm has any material conflict of interest with Ventrus Biosciences Inc, of which the research analyst
knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific
investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a
substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Ventrus Biosciences Inc for any investment banking services within twelve
months before, but intends to seek compensation from the companies mentioned in this report for investment banking services within
three months, following publication of the research report.
Neither the research analyst nor any member of the research analyst's household nor the Firm serves as an officer, director or advisory
board member of Ventrus Biosciences Inc.
The Firm does make a market in Ventrus Biosciences Inc securities as of the date of this research report.
Any opinions expressed herein are statements of our judgment as of the date of publication and are subject to change without notice.
Reproduction without written permission is prohibited. The intraday prices of securities mentioned in this report are as of Nov 14 2011.
Additional information is available to clients upon written request. For complete research report on Ventrus Biosciences Inc, please call
(212) 356-0500.
Readers are advised that this analysis report is issued solely for informational purposes and is not to be construed as an offer to sell or
the solicitation of an offer to buy. The information contained herein is based on sources which we believe to be reliable but is not
guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Past performance
is no guarantee of future results.
RODMAN & RENSHAW EQUITY RESEARCH 6