Shares of the company, which reported quarterly
results on Monday, fell as much as 15 percent in early trade on
Analysts and investors had expected the company to address concerns
that the drug, once seen as a potential blockbuster, has not lived
up to expectations after 18 months on the market.
Qsymia was the first diet pill to launch in the United States in
more than a decade.
But both doctors and patients have shown reluctance to embrace it
and other diet pills, including Arena Pharmaceuticals Inc's Belviq,
because of the long history of safety concerns surrounding diet
In Qsymia's case, side-effects can include a rise in heart rate,
suicidal thoughts, eye problems, and a higher propensity for women
to give birth to children with defects.
Analysts said on Tuesday that Vivus, with its limited sales force,
needed a partner to ensure the drug's success.
"(But) while management's dialogue on the (earnings) call stated
that it is 'open' to signing an agreement, we did not get the sense
that an announcement on this front will occur soon," J.P. Morgan
analyst Cory Kasimov said.
Kasimov downgraded the stock to "neutral" from "overweight".
Vivus is negotiating from a position of weakness due to "flattish"
prescription trends for Qsymia in spite of discount programs, BofA
Merrill analysts said.
They cut their rating on the stock to "underperform" from "neutral"
and slashed their peak sales estimate for the drug to $1 billion in
2021 from $1.8 billion.
"Fourth-quarter results of $7.7 million in Qsymia sales were
disappointing in our view and illustrate the limited reach of Vivus'
150 rep sales force," the analysts said.
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Vivus blamed "seasonality" for weighing on Qsymia sales in
November and December.
"We knew (the Qsymia) launch wouldn't be easy, but disappointment
still stems from the fact that after 5 full quarters, a drug that is
indicated for over a 100 million people in the United States has yet
to eclipse $10 million in quarterly sales," Kasimov said.
Jefferies & Co analysts, reiterating their "underperform" rating,
cut their price target to $2 from $5, citing a lack of clarity on
partnerships and evidence of an improved strategy following a proxy
battle last summer.
Dissident shareholder First Manhattan Co won an acrimonious proxy
fight last July and succeeded in appointing a new CEO, Tony Zook,
after accusing the drugmaker's previous management of having bungled
the launch of the pill.
Vivus reported total revenue of $44.1 million in the fourth quarter,
up from $2 million a year earlier, due mostly to $34.8 million in
license revenue from Auxilium Pharmaceuticals Inc and Sanofi SA,
which have licensed its erectile dysfunction drug.
(Reporting by Natalie Grover in
Bangalore; Editing by Sriraj Kalluvila)
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