Crash diets can be all the rage but quickly fade when word-of-mouth turns against them. Vivus, maker of the new weight-loss drug Qsymia, is trying a slow and steady rollout to avoid the same kind of backlash against its potential blockbuster.
Vivus ($VVUS) Chief Commercial Officer Michael Miller calls it "focused and very educationally based." Some experts call it essential.
"A slower launch that allows people some time to try and use the drug, and make sure the effects they are seeing are good and any risks are more modest, makes more sense both in the medical and financial sense," Kurt Kessler of ZS Associates tells Reuters.
Vivus' management has caught some heat from investors who think the rollout and sales have been lackluster for the first weight-loss drug approved by the FDA in more than 10 years. Sales in the first couple of weeks were just $41,000, way below what some expected. They have been growing slowly and IMS Health estimated fourth-quarter sales of $800,000. That, too, was below many forecasts. Vivus CEO Leland Wilson publicly took responsibility for not tamping down analyst expectations ahead of the launch.
|Vivus CEO Leland Wilson|
But half the stock watchers still have a buy recommendation on the stock, Reuters reports, and think peak sales could hit $1.2 billion by 2017. That won't happen if the company doesn't take the time to build trust with doctors and patients, explains John Singer, a marketing consultant who was part of the launch in 1999 of Roche's ($RHHBY) Xenical weight-loss drug. He says the company needs to educate them carefully about expectations and keep side effects from becoming the story.
Singer says when Xenical's side effect of diarrhea became fodder for late-night talk shows hosts, it kept many potential users from giving it a try. "Very quickly, the side-effects profile of Xenical became front and center of the story of the drug," Singer says.
All well and fine, but some analysts think Vivus needs a partner with the marketing muscle to get the word out in whatever fashion. Among those is Cowen & Co. analyst Simos Simeonidis, who in a note to investors said, "We continue to believe that the only way to maximize Qsymia's potential and make it a blockbuster product, is through a significant primary care sales force, selling it not in a vacuum, but backed up by the (marketing, analytics, reimbursement, etc.) infrastructure only found within big pharma (and some large spec pharma) companies."
- read the Reuters story