Exhibit 10.5

OPTION AND PUT AGREEMENT

This OPTION AND PUT AGREEMENT (this “ Agreement ”), dated as of April 3, 2008, is by and among VIVUS, Inc., a Delaware corporation (the “ Company ”), Deerfield ED Corporation, a Delaware corporation (“ ED ”), and the entities listed on Exhibit 1 hereto (each a “ Stockholder ” and together the “ Stockholders ”).

W I T N E S S E T H :

WHEREAS, the Stockholders own all of the issued and outstanding capital stock of ED;

WHEREAS, concurrently with the execution of this Agreement, the Company and ED are entering into a Funding and Royalty Agreement (the “ Funding and Royalty Agreement ”) pursuant to which ED has agreed to provide the Company with funding for the development of certain products and the Company has granted ED the right to receive a Royalty with respect to sales of MUSE and Avanafil; and

WHEREAS, the Stockholders have agreed to grant the Company an option to purchase from the Stockholders all of the outstanding shares of common stock of ED on the terms and conditions set forth herein, and the Company has agreed to grant to the Stockholders an option to require the Company to purchase from the Stockholders all of the outstanding shares of common stock of ED on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of mutual agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1                                  Definitions .

“ Avanafil ” has the meaning set forth in the Funding and Royalty Agreement.

“ Arrangement Fee ” shall have the meaning set forth in Section 4.8 .

“ Base Option Price ” means $25,000,000 if the Option Closing Date occurs on or prior to the third anniversary of the date hereof and $28,000,000 if the Option Closing Date occurs subsequent to the third anniversary of the date hereof.

“ Base Put Price ” means (x) $23,000,000 in the case of a Put Closing that occurs on or prior to the third anniversary of the date hereof pursuant to a Major Transaction Notice, (y) $26,000,000 in the case of a Put Closing that occurs subsequent to the third anniversary of the date hereof pursuant to a Major Transaction Notice and (z) $17,000,000 in all other cases.

“ Business Day ” means a day other than a Saturday, Sunday or day on which banks in the City of New York are authorized or required to be closed.

“ Cash ” and “ Cash Equivalents ” means (a) unrestricted funds in bank accounts; (b) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (c) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits; (d) securities with maturities of one year or less issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by Standard & Poor’s Rating Service (“S&P”) or A by Moody’s Investors Service, Inc. (“Moody’s”); (e) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (d) of this definition; (f) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, and (ii) are rated AAA by S&P and Aaa by Moody’s or (g) available for sale securities which are rated AAA by S&P and Aaa by Moody’s.

“ Cash Adjustment ” means the amount of Cash and Cash Equivalents held by ED as of the Option Closing Date or the Put Closing Date, as the case may be.

“ Cash and Cash Equivalent Notice ” has the meaning set forth in Section 3.3(b).

“ Closing ” shall have the meaning set forth in Section 8.2 .

“ Company Documents ” has the meaning set forth in Section 6.2 .

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Contract ” means any note, bond, mortgage, indenture, contract, agreement, guaranty, lien, pledge, lease, purchase order, sales order, arrangement or other commitment, obligation or understanding, written or oral, to which a Person is a party or by which a Person or its assets or properties are bound.

“ Damages ” means any loss, liability, claim, damage or expense (including reasonable attorneys’ fees).

“ Encumbrance ” means any security interest, mortgage, lien, pledge, charging order, warrant, option, conversion right, purchase right or other encumbrance of any sort.

“ Funding Adjustment ” means the amount of any Funding Payments that have not been made under the Funding and Royalty Agreement.

“ Funding and Royalty Agreement ” has the meaning set forth in the Recitals to this Agreement.

“ Funding Payment ” has the meaning set forth in the Funding and Royalty Agreement.

“ GAAP ” means generally accepted accounting principles as recognized by the American Institute of Certified Public Accountants.

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any municipal, local, city or county government, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Governmental Authorization ” means any approval, consent, license, permit, waiver or other authorization issued, granted or given by or under the authority of any Governmental Authority.

“ Indemnified Party ” has the meaning set forth in Section 9.4(a) .

“ Indemnifying Party ” has the meaning set forth in Section 9.4(a) .

“ Law ” means any foreign, federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, Order, requirement or rule of law (including common law), as amended and in effect from time to time.

“ Legal Requirement ” means any federal, state, local or foreign statute, law, treaty, rule, regulation, Order, decree, writ, injunction or determination of any arbitrator, court or Governmental Authority and, with respect to any Person, includes all such Legal Requirements applicable or binding upon such Person, its business or the ownership or use of any of its assets.

“ Liabilities ” means any and all debts, liabilities and obligations of any sort, whether accrued or fixed, absolute or contingent, matured or unmatured, determined or determinable, including those arising under any Legal Requirement or Contract or otherwise.

“ Major Transaction ” means (A) a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or similar event (1) following which the holders of common stock of the Company immediately preceding a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or similar event either (a) no longer hold a majority of the shares of the common stock of the Company or (b) no longer have the ability to elect a majority of the board of directors of the Company or (2) as a result of which shares of common stock of the Company are changed into (or the shares of common stock become entitled to receive) the same or a different number of shares of the same or another class or classes of stock or securities of the Company or another entity (collectively, a “ Change in Control Transaction ”), (B) a sale or transfer of assets of the Company in one transaction or a series of related transactions where the consideration to be payable at and within thirty (30) days of closing of such transaction or transactions has a value of more than $350,000,000, or a sale, transfer or license of all or substantially all assets or proprietary rights of the Company that relate specifically to MUSE or Avanafil, or (C) a purchase, tender or exchange offer made to the holders of outstanding shares of the Company’s common stock, such that following such purchase, tender or exchange offer a Change in Control Transaction shall have occurred; or (D) an issuance or series of issuances by the Company in related transactions of an aggregate number of shares of common stock in excess of 20% of the Company’s outstanding common stock on the

date hereof if, immediately prior to such issuance or series of issuances, the Market Capitalization of the Company is less than $300,000,000.

“ Major Transaction Notice ” has the meaning set forth in Section 3.3 .

“ Market Capitalization of the Company ” means the aggregate of the value of all of the Company’s outstanding shares of common stock based on the volume weighted average price of such shares on the NASDAQ Global Market as reported by Bloomberg Financial Markets or an equivalent reliable reporting source (“Bloomberg”) or if NASDAQ is not the principal trading market for such shares, the volume weighted average price of such shares on the principal securities exchange or the trading market whose such shares are listed or traded as reported by Bloomberg.

“ MUSE ” has the meaning set forth in the Funding and Royalty Agreement.

“ Net Sales ” shall have the meaning ascribed to that term in the Funding and Royalty Agreement.

“ Option ” has the meaning set forth in Section 2.1 .

“ Option Closing ” has the meaning set forth in Section 2.5 .

“ Option Closing Date ” has the meaning set forth in Section 2.4 .

“ Option Period ” has the meaning set forth in Section 2. 4.

“ Option Premium ” has the meaning set forth in Section 2.2 .

“ Option Purchase Price ” has the meaning set forth in Section 2.3 .

“ Order ” means any binding order, judgment, ruling, subpoena or verdict rendered by any Governmental Authority or by any arbitrator.

“ Party ” means the Company, ED and the Stockholders, and “ Parties ” means all such Persons.

“ Permitted Encumbrances ” means (i) all Encumbrances approved in writing by the Company; (ii) mechanics’, materialmen’s, carriers’, workmen’s, warehousemen’s, repairmen’s and landlords’ liens or other like Encumbrances arising or incurred in the ordinary course of business for amounts which are not material and not yet due and payable; (iii) Encumbrances for Taxes and other governmental charges that are not due and payable or delinquent or which are being contested in good faith through appropriate Proceedings and (iv) Encumbrances arising under Contracts with third parties entered into in the ordinary course of business in respect of amounts still owing.

“ Person ” means any corporation, association, joint venture, partnership, limited liability company, organization, business, individual, trust, Governmental Authority or other legal entity.

“ Proceeding ” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal or administrative) commenced, conducted, or heard by or before any Governmental Authority or arbitrator.

“ Put Closing ” has the meaning set forth in Section 3.6 .

“ Put Closing Date ” means the date on which the Shares are sold to the Company pursuant to the Put Right.

“ Put Exercise Notice ” has the meaning set forth in Section 3.5 .

“ Put Period ” has the meaning set forth in Section 3.2 .

“ Put Purchase Price ” has the meaning set forth in Section 3.4 .

“ Put Right ” has the meaning set forth in Section 3.1 .

“ Royalty ” has the meaning set forth in the Funding and Royalty Agreement.

“ Royalty Adjustment ” means the amount of accrued and unpaid Royalties for all periods of time ending on the Option Closing Date or the Put Closing Date, as the case may be.  For purposes of determining the amount of Royalties payable with respect to the quarterly period during which an Option Closing or Put Closing occurs, it shall be assumed that Net Sales of MUSE were made at the same rate as Net Sales in the comparable period of the prior year and that Net Sales of PDE-5I were made at the same rate as Net Sales in the immediately preceding quarter.

“ Royalty Default Notice ” shall have the meaning set forth in Section 3.2 .

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Security Agreement ” has the meaning set forth in Section 3.1A .

“ Shares ” shall have the meaning set forth in Section 4.2 .

“ Stockholder Documents ” has the meaning set forth in Section 5.2 .

“ Stockholders ” has the meaning set forth in the first paragraph of the Agreement.

“ Straddle Period ” means any Taxable Period that begins on or before, and ends after, the Option Closing Date or the Put Closing Date, as applicable.

“ Subscription Agreements ” has the meaning set forth in Section 4.2 .

“ Tax Adjustment ” means the amount of accrued Taxes of ED for all periods up to the Option Closing or the Put Closing, as the case may be, to the extent such Taxes have not been paid by ED as of the applicable Closing.

“ Taxable Period ” shall mean any taxable year or any other period that is treated as a taxable year (or other period, or portion thereof, in the case of a Tax imposed with respect to such other period; e.g. , a quarter) with respect to which any Tax may be imposed under any applicable statute, rule, or regulation.

“ Taxes ” means any and all U.S. federal, state and local taxes, assessments and other governmental charges, duties, impositions, levies and liabilities, including, without limitation, taxes based upon or measured by gross receipts, income profits, sales, use and occupation, and value added, goods and services, ad valorem, transfer, gains, franchise, withholding, payroll, recapture, employment, excise, unemployment, insurance, social security, business license, occupation, business organization, stamp, environmental and property taxes, together with any interest, penalties and additions imposed with respect to such amounts.  For purposes of this Agreement, “Taxes” also includes any obligations under any agreements or arrangements with any Person with respect to the liability for, or sharing of, Taxes.

“ Tax Return ” means any return, statement, declaration, report, estimate, notice, form, schedule or other document (including estimated Tax returns and reports, withholding Tax returns and reports, any schedule or attachment, information returns and reports and any amendment to any of the foregoing) relating to Taxes.

ARTICLE II

OPTION

2.1                                  Option .  On the terms and subject to the conditions of this Agreement, the Stockholders hereby grant the Company an option (the “ Option ”) which, when exercised, shall obligate each of the Stockholders to sell the Shares to the Company, and the Company to purchase the Shares from each of the Stockholders.

2.2                                  Option Premium .  In consideration of the grant by the Stockholders to the Company of the Option, the Company shall simultaneously with the payment of the first Funding Payment under the Funding and Royalty Agreement pay to the Stockholders Two Million Dollars ($2,000,000) (the “ Option Premium ”) by wire transfer of immediately available funds to the account listed in Exhibit 2 hereto.  Such amount shall be allocated between the Stockholders as provided in Exhibit 2 hereto.  If the Option is exercised by the Company, upon closing of the sale of the Shares the Option Premium shall be applied against the Option Purchase Price in accordance with Section 2.3 below.  In all other circumstances, including but not limited to the sale of the Shares pursuant to the Put Right, the Stockholders shall be entitled to retain the Option Premium.

2.3                                  Option Purchase Price .  If the Company exercises the Option, the aggregate consideration to be paid by the Company (the “ Option Purchase Price ”) to the Stockholders for the Shares shall be equal to the sum of the Base Option Price plus the Cash Adjustment plus the Royalty Adjustment, and minus the Option Premium, the Tax Adjustment, the Funding Adjustment and any other outstanding liabilities of ED.  The Stockholders shall provide written notice of the amount of the Cash Adjustment, the Tax Adjustment and any other outstanding

liabilities of ED, and the Company shall provide written notice of the amount of the Royalty Adjustment, no later than five (5) Business Days prior to the Option Closing Date.  At the Option Closing, the Company shall pay the Option Purchase Price to the Stockholders by wire transfer of immediately available funds to an account or accounts designated in writing by the Stockholders.  The Option Purchase Price shall be allocated between the Stockholders pro rata in accordance with the percentage of the Shares held by the Stockholders.

2.4                                  Term and Method of Exercise of Option .  The Option shall commence on the date of this Agreement and terminate at 5:00 p.m. Eastern time on the fourth anniversary of the date of this Agreement (the “ Option Period ”).  Except as hereafter provided, at any time prior to the expiration of the Option Period, the Company may exercise the Option by delivery to the Stockholders of a written notice (the “ Option Exercise Notice ”) substantially in the form of Exhibit 3 hereto.  The Option Exercise Notice shall constitute a binding obligation of the Company to purchase, and the Stockholders to sell, all of the Shares pursuant to the terms and conditions of this Agreement.  The Option Exercise Notice may be delivered on any Business Day during the Option Period that is at least twenty (20) days prior to the expiration of the Option Period and shall specify a closing date (the “ Option Closing Date ”) for the sale of the Shares pursuant to the Option, which shall be a Business Day not earlier than ten (10) nor later than twenty (20) days, after the date of the Option Exercise Notice.

2.5                                  Option Closing .  The closing of the sale of Shares pursuant to the Option (the “ Option Closing ”) shall take place at the offices of Katten Muchin Rosenman LLP, in New York, New York, commencing at 10:00 a.m., local time, on a Business Day within the Option Period.  The Option Closing shall be effective as of 5:00 p.m., local time, on the Option Closing Date, and all actions scheduled in this Agreement for the Option Closing Date shall be deemed to occur simultaneously at that time, except as otherwise contemplated hereby or as expressly agreed in writing by the Parties.  At the Option Closing the Stockholders shall deliver to the Company certificates representing the Shares, duly endorsed in blank (or accompanied by duly executed stock powers in blank), and the Company shall deliver to the Stockholders the Option Purchase Price by wire transfer of immediately available funds to an account or accounts specified by the Stockholders.

ARTICLE III

PUT RIGHT

3.1                                  Put Right .  On the terms and subject to the conditions of this Agreement, the Company hereby grants the Stockholders an option (the “ Put Right ”) which, when exercised, shall obligate the Company to purchase the Shares from each of the Stockholders, and obligate each of the Stockholders to sell the Shares to the Company.

3.2                                  The Put Period .  The Put Right shall commence on the earliest of (a) the third anniversary of the date of this Agreement, (b) any date on which (i) the Market Capitalization of the Company falls below $50,000,000 or (ii) the amount of Cash and Cash Equivalents held by the Company falls below $15,000,000, (c) the fifteenth day following the delivery of written notice to the Company (a “ Royalty Default Notice ”) that the Company has failed to pay

Royalties in accordance with the provisions of the Funding and Royalty Agreement which failure constitutes a breach of the Funding and Royalty Agreement, unless the Company shall have paid such Royalties prior to such fifteenth day and (d) the closing of a Major Transaction.  The Put Right shall terminate on the tenth anniversary of the date hereof.  The period during which the Shares may be sold pursuant to the Put Right is referred to as the “ Put Period .”

3.3                                  Major Transaction Notice and Cash and Cash Equivalent Notice .  (a) At least twenty (20) days prior to the consummation of any Major Transaction, but, in any event, not later than the date of the public announcement of such Major Transaction, the Company shall deliver to the Stockholders a written notice setting forth the terms of such Major Transaction (a “ Major Transaction Notice ”).  If, subsequent to the delivery of the Major Transaction Notice, the Stockholders shall have delivered a Put Exercise Notice (as defined below) then, not less than three (3) Business Days prior to the consummation of such Major Transaction, the Company shall deliver to the Stockholders a dated written notice specifying the anticipated closing date for such Major Transaction.

(b)                                  Not less than two (2) Business Days after any date on which the amount of Cash and Cash Equivalents of the Company falls below $15,000,000, the Company shall deliver written notice (a “ Cash and Cash Equivalent Notice ”) thereof to the Stockholders.

3.4                                  Put Purchase Price .  If the Stockholders exercise the Put Right, the aggregate consideration to be paid by the Company (the “ Put Purchase Price ”) to the Stockholders for the Shares shall be equal to the Base Put Price plus the Cash Adjustment and the Royalty Adjustment and minus the Tax Adjustment, the Funding Adjustment and any other outstanding liabilities of ED.  The Stockholders shall provide written notice of the amount of the Cash Adjustment, the Tax Adjustment and any other outstanding liabilities of ED, and the Company shall provide written notice of the amount of the Royalty Adjustment, no later than five (5) Business Days prior to the Put Closing Date.  At the Put Closing, the Company shall pay the Put Purchase Price to the Stockholders by wire transfer of immediately available funds to an account or accounts designated in writing by the Stockholders.  The Put Purchase Price shall be allocated among the Stockholders pro rata in accordance with the number of the Shares held respectively by the Stockholders.

3.5                                  Method of Exercise .  Except as hereinafter provided, at any time during the Put Period, all, but not less than all, of the Stockholders may exercise the Put Right by delivery to the Company of a written notice executed by each of the Stockholders (the “ Put Exercise Notice ”) substantially in the form of Exhibit 3 hereto.  The Put Exercise Notice shall constitute a binding obligation of the Company to purchase, and the Stockholders to sell, all of the Shares pursuant to the terms and conditions of this Agreement.  The Put Exercise Notice may be delivered on any Business Day during the Put Period that is at least twenty (20) days prior to the expiration of the Put Period.  In addition, the Put Exercise Notice given in respect of (a) the Put Right provided for in Section 3.2(a)  may also be given on any date that is no more than twenty (20) days prior to the third anniversary of the date hereof, (b) the Put Right provided for in Section 3.2(b)(ii) and 3.2(d)  may also be given at any time after the delivery of a Cash and Cash Equivalent Notice or a Major Transaction Notice, as the case may be, and (c) the Put Right provided for in Section 3.2(c) may be given simultaneously with or at any time after the delivery of a Royalty Default Notice.  The Put Exercise Notice in respect of all Put Rights other than the Put Right provided for in Section 3.2(d) shall specify a closing date

for the sale of Shares pursuant to the Put Right, which shall be a Business Day not earlier than ten (10), nor later than twenty (20), days after the date of the Put Exercise Notice.  The Put Exercise Notice in respect of the Put Right provided for in Section 3.2(d) shall specify that the closing date for the sale of the Shares shall take place simultaneously with the closing of the Major Transaction or on a date that is mutually agreeable to the Stockholders and the Company that is prior to the closing of the Major Transaction.

3.6                                  Put Closing .  The closing of the purchase of the Shares pursuant to the Put Right (the “ Put Closing ”) shall take place at the offices of Katten Muchin Rosenman LLP, in New York, New York, commencing at 10:00 a.m., local time on a Business Day within the Put Period.  The Put Closing shall be effective as of 5:00 P.M., local time, on the Put Closing Date, and all actions scheduled in this Agreement for the Put Closing Date shall be deemed to occur simultaneously at that time, except as otherwise contemplated hereby or as expressly agreed in writing by the Parties.  At the Put Closing the Stockholders shall deliver to the Company certificates representing the Shares, duly endorsed in blank (or accompanied by duly executed stock powers in blank), and the Company shall deliver to the Stockholders the Put Purchase Price, by wire transfer of immediately available funds to an account or accounts specified by the Stockholders in writing to the Company.

3.7                                  Major Transaction Closing .  Notwithstanding anything to the contrary contained herein, the Company shall not consummate a Major Transaction if the Stockholders have previously delivered a Put Exercise Notice unless the Put Purchase Price is paid to the Stockholders in full prior to or simultaneously with the consummation of such Major Transaction.

ARTICLE IIIA

SECURITY AGREEMENT

3.1A                        Security Agreement .  As security for the performance of its obligations with respect to the Put Right, simultaneously with the execution of this Agreement the Company has entered into the Security Agreement (the “ Security Agreement ”) annexed hereto as Exhibit 4 .

ARTICLE IV

REPRESENTATIONS RELATING TO ED

The Stockholders and ED jointly and severally represent to the Company that:

4.1                                  ED is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  ED has the requisite corporate power and authority to own the assets that it owns and to conduct its business. The current officers of ED are as follows: Peter Steelman, President; Alexander Karnal, Secretary and Jeffrey Kaplan, Treasurer. The Stockholders shall notify the Company as soon as practicable following any change in the

officers of ED that occurs prior to the earlier of (x) the exercise of the Option or the Put Right and (y) the expiration of the Option and the Put Right.

4.2                                  The authorized capital stock of ED consists of 21,000 shares of common stock having a par value of $0.001 per share.  As of the date of this Agreement, none of such authorized shares are outstanding.  All of the foregoing shares have been duly authorized and validly issued and are fully paid and nonassessable and free of preemptive and similar rights.  Except as expressly contemplated by this Agreement and except for shares of common stock which are the subject of the Subscription Agreements (the “ Subscription Agreements ”), dated on or about the date hereof, between ED and the respective Stockholders, there are no outstanding (i) shares of capital stock, debt securities or other voting securities of ED; (ii) securities of ED which are or may become convertible into or exchangeable for shares of capital stock, debt securities or voting securities or ownership interests in ED; (iii) Contracts that grant or may grant the right to acquire from ED, or obligations of ED to issue any capital stock, debt securities, voting securities or other ownership interests in, or any securities convertible into or exchangeable or exercisable for any capital stock, voting securities, debt securities or ownership interests in, ED, or obligations of ED to grant, extend or enter into any such agreement or commitment; or (iv) obligations of ED to repurchase, redeem or otherwise acquire any outstanding securities of ED, or to vote or to dispose of any shares of the capital stock of ED.  All of the outstanding equity securities of ED have been offered and issued in compliance with all applicable federal and state securities laws, including “blue sky” laws.  Any outstanding shares of capital stock of ED, including the shares of common stock issuable pursuant to the Subscription Agreements, are referred to as the “ Shares .”

4.3                                  There are no agreements, arrangements, proxies or understandings that restrict or otherwise affect the transfer of any of the Shares except as set forth in this Agreement.

4.4                                  ED has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, and the execution and delivery of this Agreement and the performance of all of its obligations hereunder have been duly authorized by ED and the Stockholders.  This Agreement has been duly executed and delivered by ED and constitutes the legal, valid and binding obligation of ED