This Obesity Drug Hits the Market, but Check Your Expectations

VIVUS' (Nasdaq: VVUS  ) Qsymia has hit pharmacy shelves first, beating Arena Pharmaceuticals' (Nasdaq: ARNA  ) obesity drug Belviq, which has to wait for the Drug Enforcement Administration to sign off on its potential for abuse; and Orexigen's (Nasdaq: OREX  ) Contrave, which isn't even approved yet since it's waiting for safety trial data.

Interestingly, VIVUS didn't issue a press release or make a big deal about the availability two months after it gained FDA approval. The availability was noted on Qsymia's website and in an SEC disclosure. Is that a sign of confidence, or is VIVUS trying to avoid hyping up investors' expectations? My guess is the latter.

VIVUS is launching without a partner. It has enlisted the help of a contract sales organization, PDI (Nasdaq: PDII  ) , to hire 150 sales reps, but management of the sales force will be internal. That'll get the job done, but don't expect the same kind of well-oiled machine that a launch from a big pharma could provide.

Without a big direct-to-consumer campaign, the difference between a fast and slow launch will come down to doctors' enthusiasm for Qsymia. On one hand, there hasn't been a new obesity drug in many years. But doctors were burned by post-launch side effects of Abbott Labs' (NYSE: ABT  ) Meridia and before that by Fen-Phen; I have a hard time seeing doctors putting most of their obese patients on Qsymia right after the launch. As with many drug for diseases that aren't immediately life-threatening, my guess is doctors will take a wait-and-see attitude, perhaps initially just prescribing to patients who ask for it.

That isn't to say Qsymia and Belviq can't be blockbusters. There's certainly a need, considering more than 35% of U.S. adults are obese. And the drugs work, Qsymia to a greater extent, but with more side effects.

But I think investors need to think a little longer term. Until doctors gain more confidence in the drugs and insurance companies decide to cover the drugs, sales are likely to be slow.

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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Abbott Laboratories. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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  • Report this Comment On September 17, 2012, at 9:06 PM, ready2chang wrote:

    Finally an article that's not too biased toward neither company/drug.

    It's gonna be a tough sell for VVUS doing mail-order.

    If VVUS have such a great potential why no BP wants to partner with them? They already went through all ther bumps and bruises why not?

  • Report this Comment On September 19, 2012, at 3:55 PM, bhasa04 wrote:

    Belviq (Lorcaserin) weight-loss clinical trial patient Ed Susman (who is a MedPage reporter in real life) lost 55 lbs in one year.

    His weight went from 293 to 238 lbs, that is 55 lbs. In other words, he lost 18% of his body weight.

    The low 3% weight loss number often quoted by "Experts" is nonsense. This drug will be a blockbuster once people start realizing the amount of weight they can lose without major side effects

    http://www.medpagetoday.com/PrimaryCare/Obesity/33723

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