Vivus ($VVUS) has taken a pounding on Wall Street with the lackluster debut of its closely watched weight-loss drug Qsymia, as the company fell short of analysts' big expectations for the launch of one of the first new diet pills to hit the U.S. market in years. Now Vivus CEO Leland Wilson has pledged to do better at managing expectations for the ongoing launch, Cowen analysts noted after a meeting with Wilson in New York on Wednesday.
In rare moments of corporate candor, Wilson also took responsibility for his company's previous shortcomings in tempering analysts' outlook for Qsymia sales, according to the analysts. And working with Wall Street is just one of several major items on the CEO's plate as he and his small company seek to conquer the massive market for drugs against obesity, which afflicts a whopping third of the U.S. population and has contributed to soaring diabetes rates, heart disease and liver ailments, among other conditions.
As Cowen framed Wilson's agenda, the company has undertaken a long-shot effort to gain a 27-month extension on the patent for its weight-loss drug beyond the year 2020 expiration date. Its seeking tie-ups with partners to expand the sales push behind Qsymia and an amendment to its REMS plan that would slash through some red tape and make the med available at retail pharmacies. Also, the company is working with insurers to reclassify the drug on formularies to reduce the co-pay of roughly $50 per script, which is more than some patients can afford. And there's the matter of the cardio outcomes study that could cost up to $225 million depending on its design and requirements from regulators.
These issues could weigh heavily on Vivus' performance and, in some cases, the blockbuster expectations for its prized weight-loss drug.
"We believe that Qsymia can become a significant drug, and at penetrations of 1.5-3% in the male and female obese population, respectively, we project peak 2019 US sales of $1B," Cowen wrote in a note to investors on Wednesday. "However, we have assumed that this only happens with the help of a big pharma partner that will employ a large and experienced primary care sales force; we don't believe that this level of sales is achievable by any small biopharma company."