Analysts on Qsymia: show me the payers
Greater distribution opportunities for Vivus weight-loss drug Qsymia may have tickled the company's stock price yesterday, but analysts are taking a hard line on the company's prospects.
It's not because the Street didn't expect the new distribution channel – as noted by Credit Suisse analyst Lee Kalowski, the regulator recommended going beyond mail order to include retail access when it green-lighted the drug in July 2012. Rather, it's that payers haven't budged, which means reduced patient interest.
Vivus has tried to goose patient acceptance through introductory pricing deals timed to coincide with post-holiday weight loss commitments, which failed to significantly boost immediate sales.
Kalowski wrote in his Tuesday research note that the immediate impact of the FDA's decision will be to take “some pressure off of Q1” results. He also noted that payer love is lacking for the prescription weight-loss category as a whole, and payer uptake is going to be a gradual process for all manufacturers.
Jefferies analyst Thomas Wei also writes that the Vivus is going to have to take the long view, writing after the FDA's afternoon approval that “it would take several years for Qsymia to become profitable for VVUS.” This is despite Wei's expectation that the retail network that includes CVS, Walmart and Walgreens will be the ones able to stock the product within 90 days. Wei also writes that Vivus' array of issues includes raising physician awareness, a thread Credit Suisse's Kalowski also noted.
Vivus has been going it alone on its marketing front, keeping its focus on the HCP side. The company has capped its sales force at 150 reps since the FDA 2012 approval and has concentrated the marketing of its drug strictly to physicians. This has meant limited promotion of the company's consumer-facing weight loss app, which is accessible with or without a Qsymia prescription. Rather than pursue a wide-ranging app promotion about a tool to lose weight through lifestyle changes, the company told MM&M it tells doctors about the app so they can share it with patients.
Vivus is not the only company struggling with trying to leverage a small sales force and navigate an anemic payer environment, with Kalowski saying Vivus will need more than 150 reps to “generate significant primary care sales,” and that Arena, which needs the FDA to schedule its approved drug Belviq, will be launching with a sales staff of 200, provided by partner Eisai.
Although Vivus has failed to win EMA approval – twice – commentary by Donny Wong that was posted in Decision Resources Tuesday indicates that Europe can't be considered a real loss, since it is unlikely that Belviq would be able to scoop up market share if it wins approval from the EMA's CHMP division. In addition to payer issues, Wong notes that Belviq works better in patients when it is paired with phentermine, which is not marketed in Europe. Wong also wrote that a Decision Resources survey shows Belviq's standalone weight-loss rate falling short of what he called the prescriber's sweet spot of 11% to 15% average weight-loss, coming in instead at 4% to 5%.