|Vivus CEO Tony Zook--Courtesy of AstraZeneca|
No one expected stellar earnings from Vivus ($VVUS), whose struggles to sell obesity drug Qsymia spawned a bitter proxy fight--and, ultimately, a board shakeup, complete with new CEO. But Vivus announced second-quarter losses much worse than anyone expected. It took the first public comments from incoming CEO Tony Zook to sustain hopes for a turnaround.
While the company highlighted 37% growth in Qsymia scripts from the prior quarter, that wasn't nearly enough to offset a wide spending gap. "These numbers may look promising, until one realizes they translate into $5.5 million in net sales, and that Vivus spent $52.5 million this quarter," Cowen and Co. analyst Simos Simeonidis wrote in a note.
But the real interest was not so much in the past as it was in Zook's plans for the future. The new CEO, who launched blockbusters Nexium and Crestor in his previous position as a sales chief at AstraZeneca ($AZN), said the Mountain View, CA-based company does not plan to launch a direct-to-consumer campaign anytime soon. Instead, he touted the importance of targeted patient and physician education, as he outlined his plans for the company. "Trust me, I've been at this game for a number of years and understand the role that an activated consumer can play," Zook said on the earnings conference call.
Zook's plans elicited optimism from some analysts, who praised his commitment to finding a Big Pharma marketing partner for Qsymia. After all, the lack of a partner has been blamed for lagging sales, and that's what ignited the proxy war against top investor First Manhattan Co. Zook said that he and the board were "personally involved" in partner negotiations and "committed to completing these discussions as rapidly as possible."
So Zook has earned some patience. "We support management's approach to 'wait and see' how retail access of Qsymia pans out, and to lock in a partner before launching a DTC campaign is positive news," Leerink Swann analyst Marko Kozul wrote in a note.
Help for Qsymia cannot come soon enough for Vivus, which now faces competition in the weight-loss drug market from Arena Pharmaceuticals' ($ARNA) Belviq. Arena rolled out its challenger in June with marketing and distribution help from Japan's Eisai; last week, it announced $1.3 million in net product sales for the second quarter, with $65 million in milestone payments from the Japanese drugmaker in connection with the U.S. launch.