After going it alone, Vivus finally open to Big Pharma sales partnership

When Vivus ($VVUS) announced first-quarter earnings yesterday, sales weren't just off of analyst estimates. They also crushed investors' hopes that the company could halt its continued failure to get its new weight-loss drug, Qsymia, off the ground.

But a message from CEO Leland Wilson that the Mountain View, CA-based company is looking to partner with Big Pharma for marketing help apparently encouraged investors. Shares rose 9.7% to $13.21, the biggest one-day increase since Dec. 17, Bloomberg reported.

"We've begun discussions with large pharmaceutical companies to explore how we can increase efforts with primary care physicians, which we believe is critical to maximizing the value of Qsymia," Wilson said yesterday on a conference call.

The move to seek sales help from a larger, more experienced company is one many say Vivus should have made at the get-go. They blame Vivus' inability to effectively market Qsymia--only the second obesity therapy to gain FDA approval since 1999--for disappointing sales and investor unrest.  

"In order for Qsymia to become a blockbuster, Vivus needs the help of a Big Pharma partner with a significant primary care sales force," wrote Simos Simeonidis, an analyst with Cowen & Co., in a note. "We don't believe that this level of sales is achievable by any small biotech/spec pharma company's sales force."

If Vivus is lucky, the announcement will placate 9.1% shareholder First Manhattan, which has been particularly vocal with its discontent. The investment firm has eyes to overhaul Vivus' board, backing 6 nominees who it says would turn Qsymia's sales around.

"They will seek out all the facts, not just the views favored by management," First Manhattan said in an April statement, which would allow them to fix "the fundamental problems at Vivus" and work on "reversing the failed Qsymia launch."

Qsymia will definitely need a boost if it's to compete with Arena Pharmaceuticals' ($ARNA) Belviq for the first time. After its FDA approval last June, the DEA finally gave the go-ahead to the weight-loss drug earlier this week, meaning Arena should be set to launch it next month.

- read the Bloomberg story

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