Vivus 'fesses up to another setback for Qsymia sales

Vivus ($VVUS) is in a jam with its brand-new obesity drug. Qsymia wasn't expected to storm out of the gate, but it wasn't expected to take a leisurely stroll, either. And now the company has another problem: After a slow-but-steady build in new prescriptions, Vivus has discovered that a sizable group of patients aren't filling their scrips because of high out-of-pocket costs.

That's one reason why Vivus' third quarter results fell short, with a larger-than-expected loss of $40.4 million. And that's one reason why analysts are tempering their expectations for Qsymia sales. One firm, Lazard Capital, cut its 2013 sales projections to $80 million from $204 million, The Street reports. Meanwhile, investors are questioning the company's sales strategies.

Insurance coverage has always been a concern for Qsymia prognosticators. In the past, most insurers haven't paid for weight-loss drugs. But early indications on that score turned out to be positive, Vivus said recently, citing reimbursement support from about one-third of payers during the drug's first week on the market. That trend hasn't continued at the same pace; the company said about 20% of scripts got some sort of reimbursement.

And the co-pays have been significant: $62 on average, Cowen & Co. analysts said in a note after the earnings call. That's been enough to fuel an abandonment rate of 30%.

One fix could be co-pay coupons. On a call with analysts, the company said it might go that route, Bloomberg Industries analyst Andrew Berens told Bloomberg News. "It sounds like they're considering strategies to offset out-of-pocket expense," he said.

Another potential aid: Bringing in a Big Pharma partner, as Cowen's Simos Simeonidis (and others) advocate. He's predicted sales of $1 billion by 2019--but "this only happens with the help of a big pharma partner that will employ an experienced primary care salesforce."

A partnership would soothe some investors who believe that Vivus' focus on specialists, rather than primary-care doctors, is wrongheaded. As Berens notes, primary care docs may be most likely to prescribe the drug, so investors "are not sure their strategy makes any sense."

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