Analyst says Vivus buyout, partner best for Qsymia sales

Firm takes lease for new headquarters
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Vivus' weight-loss drug Qsymia--courtesy of Vivus.

Qsymia from Vivus ($VVUS) is all about losing weight and getting smaller, but the Bay Area drugmaker has decided to significantly expand its own waistline. 

Even as sales of its weight-loss drug Qsymia fall short of expectations, Vivus has signed a lease for more than 45,000 square feet of space in San Francisco, according to the Silicon Valley Business Journal. That compares with the 18,000 square feet it currently occupies. Officials wouldn't comment about the need for more space, but the company is working to build sales of Qsymia, as well as its erectile dysfunction drug Stendra, and has more in the pipeline.

How fast it will be able to build Qsymia sales has become a subject for office pools around the industry, and Cowen & Co. analyst Simos Simeonidis recently added his two cents. While he believes Vivus will be able to build market strength this year, he also recently said it is going about it the wrong way. In a note to investors he said Vivus needs a direct-to-consumer campaign and a partner to pull it off.

"We continue to maintain our view that Vivus needs big pharma's muscle and wallet (aka DTC) to make Qsymia a blockbuster. We continue to believe that the only way to maximize Qsymia's potential and make it a blockbuster product, is through a significant primary care sales force, selling it not in a vacuum, but backed up by the (marketing, analytics, reimbursement etc) infrastructure only found within big pharma (and some large spec pharma) companies," Simeonidis said. Citing IMS Health numbers, he said it appears Qsymia had Q4 sales of about $800,000, which--while growing--he believes falls short of investors expectations.

Qsymia is under the microscope since it is the first weight-loss drug the FDA has approved in decades and will provide an indication of whether healthcare providers will be comfortable adding drugs to a weight-loss regimen. Vivus recently offered a free-trial program to gin up some interest, and it is getting pharmacy benefit groups such as Express Scripts ($ESRX) to cover it. But that is not enough as far as Simeonidis sees it.

"We continue to believe that Qsymia is an asset whose potential can only be maximized in the hands of big pharma, either via a partnership and/or an (eventual) acquisition. We believe that another quarter or two of similar lackluster scripts and sales should result in additional shareholder pressure which could force management to rethink its strategy," he tells his clients.  

read the Silicon Valley Business Journal 

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