With Qsymia still flailing, Vivus to cut 20 jobs, replace CFO
Vivus ($VVUS) says it's laying off 20 staffers to cut its losses as the obesity drug Qsymia continues to flounder. Launched last year, Qsymia brought in just $6.4 million for the third quarter, far from the lofty sales projected as the drug neared FDA approval. And with the drug still struggling for a market foothold, analysts worry that Vivus will have a hard time attracting a partner that can apply its marketing savvy to the job.
The job cuts follow months of turmoil at the Mountain View, CA-based company. After a bitter proxy fight over the summer, Vivus essentially handed over control to dissident shareholders and their hand-picked directors and CEO. But almost as soon as ex-AstraZeneca ($AZN) exec Tony Zook took the helm, he was forced to step down for health reasons.
Now, there's more change at the top. With CEO Seth H.Z. Fischer now in place and CFO Timothy Morris stepping aside, the company's controller, Svai Sanford, is taking that slot on an interim basis.
Sadly for Vivus investors--and those 20 soon-to-be-laid-off employees--the Qsymia pain is largely seen as self-inflicted. The company thought it could sell itself when the drug hit the market, but buyers never emerged. Rather than signing on a Big Pharma marketing partner at that point, Vivus decided to hire its own sales force and go it alone. That obviously didn't work so well. The new management aims to turn the tide, but at the very least it will take time--and till then, investors will be skeptical.
Indeed, analysts cut their ratings on Vivus shares, saying the lackluster sales this quarter weaken the company's pitch to potential marketing partners, and the company's 150 sales reps aren't enough to promote the drug to the primary-care market. Bank of America cut its peak sales estimate on Qsymia to $1.8 billion by 2020, down from $2.3 billion.
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