Vivus 'fesses up to another setback for Qsymia sales

30% of patients walk away from their scrips on out-of-pocket costs

Vivus ($VVUS) is in a jam with its brand-new obesity drug. Qsymia wasn't expected to storm out of the gate, but it wasn't expected to take a leisurely stroll, either. And now the company has another problem: After a slow-but-steady build in new prescriptions, Vivus has discovered that a sizable group of patients aren't filling their scrips because of high out-of-pocket costs.

That's one reason why Vivus' third quarter results fell short, with a larger-than-expected loss of $40.4 million. And that's one reason why analysts are tempering their expectations for Qsymia sales. One firm, Lazard Capital, cut its 2013 sales projections to $80 million from $204 million, The Street reports. Meanwhile, investors are questioning the company's sales strategies.

Insurance coverage has always been a concern for Qsymia prognosticators. In the past, most insurers haven't paid for weight-loss drugs. But early indications on that score turned out to be positive, Vivus said recently, citing reimbursement support from about one-third of payers during the drug's first week on the market. That trend hasn't continued at the same pace; the company said about 20% of scripts got some sort of reimbursement.

And the co-pays have been significant: $62 on average, Cowen & Co. analysts said in a note after the earnings call. That's been enough to fuel an abandonment rate of 30%.

One fix could be co-pay coupons. On a call with analysts, the company said it might go that route, Bloomberg Industries analyst Andrew Berens told Bloomberg News. "It sounds like they're considering strategies to offset out-of-pocket expense," he said.

Another potential aid: Bringing in a Big Pharma partner, as Cowen's Simos Simeonidis (and others) advocate. He's predicted sales of $1 billion by 2019--but "this only happens with the help of a big pharma partner that will employ an experienced primary care salesforce."

A partnership would soothe some investors who believe that Vivus' focus on specialists, rather than primary-care doctors, is wrongheaded. As Berens notes, primary care docs may be most likely to prescribe the drug, so investors "are not sure their strategy makes any sense."

- see the Bloomberg coverage
- read the The Street's analysis

Related Articles:
EMA committee shoots down Vivus diet pill
More payers than expected cover Vivus' Qsymia
Some docs not so hot on potential for diet drugs Qsymia, Belviq
Vivus shares drop amid speculation about IP threats to diet drug
Can Vivus diet drug beat Arena's Belviq?


Filed Under