With Qsymia sales sputtering, Vivus shares take a dive

The advent of new obesity drugs was supposed to be a watershed moment. No new fat-fighting pills had been approved in years, and some one-in-three Americans are obese. But so far, physicians haven't been quick to pull out their prescription pads.

Vivus ($VVUS) and its diet pill Qsymia are the case study. The company won FDA approval for the drug last July, and Vivus commenced its launch in September. No one expected doctors to jump in with both feet, but sales failed to accelerate much, partly because of reimbursement problems and out-of-pocket costs for patients, partly because it's sold only via mail order under a risk-management plan. Some blame Vivus' stubborn refusal to sign up a Big Pharma marketing partner, too.

In fact, sales haven't accelerated much at all. For the fourth quarter of last year, Qsymia brought in only $2 million. That was $1 million less than analysts had expected, and they weren't expecting a whole lot, comparatively speaking. As The Street points out, analysts last fall figured on $24 million in Q4 sales. So, the $3 million expectation was already a far cry from initial hopes. What's worse, Vivus laid out plenty of cash to generate that paltry $2 million.

Some industry-watchers think a slow-but-steady approach is best for Qsymia, to build trust with patients and doctors. And Vivus did score a contract with Express Scripts ($ESRX) in late December. The FDA may allow broader distribution beginning in April. But for Vivus to continue covering its costs, it needs Qsymia to pick up speed significantly--or find more financing, The Street says.

No doubt Arena Pharmaceuticals ($ARNA) is watching Qsymia closely for hints to its own prospects. Its Belviq drug is FDA-approved but not yet launched. Orexigen Therapeutics ($OREX) has its own obesity drug awaiting FDA approval as well. Whether either of these will fare better than Qsymia has remains to be seen.

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