Why VIVUS Shares Shed Some Weight

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of VIVUS (NASDAQ: VVUS  ) , manufacturer of the FDA-approved chronic weight management pill Qsymia, slumped as much as 12% after reporting its fourth-quarter earnings results.

So what: For the quarter, VIVUS reported product revenue of $2 million and a loss of $0.56 per share compared to just $0.13 last year as marketing expenses have risen dramatically. Wall Street had been looking for VIVUS to report sales of $3 million and a much smaller loss of just $0.25 per share. All told, VIVUS has now filled approximately 57,000 prescriptions of Qsymia, with 17,400 of those coming in the latest rolling month ended Feb. 15.

Now what: We sort of knew to expect that Qsymia's sales figures weren't going to be great, but even I was sort of surprised at how rapidly costs rose and sales slumped. With Aetna on board and covering Qsymia, it seems to me only a matter of time until other insurers join the fray. What will really differentiate whether VIVUS is successful will be its ability to sell Qsymia once Arena Pharmaceuticals' (NASDAQ: ARNA  ) Belviq makes it to market in the U.S., and, how long, if ever, it'll take Qsymia to get approved in Europe. The Committee for Medicinal Products for Human Use recommended further safety testing be done on Qsymia by rejecting VIVUS' appeal last week, so it looks like a long road from that respect. Luckily for VIVUS shareholders, things aren't looking like smooth sailing for Arena's Belviq, either, with the EU panel requesting additional information regarding the risks and benefits associated with the drug in January. For the time being it looks like VIVUS shareholders are going to be stuck in limbo.

Craving more input? Start by adding VIVUS to your free and personalized watchlist so you can keep up on the latest news with the company.

Who will win the obesity drug market?
Can VIVUS pick up its lagging sales and fend off the competition, or will Arena Pharmaceuticals reign supreme in the obesity space? If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to stay up to date. Senior biotech analyst Brian Orelli gives investors the must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at Arena and VIVUS -- complete with a full year of free updates -- today.


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  • Report this Comment On February 27, 2013, at 5:05 AM, RSRdriver wrote:

    Vivus's plight certainly means that Arena is heading toward bankruptcy with Belviq. What MD's here or abroad will prescribe a drug that costs almost twice as much as it's competitor (Vivus) and on top of that, works a little over 1/3 as well, under clinical conditions!

    The insurance companies refusing a co pay, the DEA investigating the 2C serotonin receptor issues, the CHMP laughing at the same resubmitted answers, U.S. MD's rejecting Belviq, the moron Areniac longs! Take your pick, any one could (and very likely all of them!) could sink the ARNA PPS to sub $4 at any moment.

  • Report this Comment On February 27, 2013, at 9:51 PM, biogemfinder wrote:

    fool on drivel..fool on..we are not that far from the day of reckoning. VVUS has already shown its cards and doesn't include any aces... how does it feel at 11 and change?

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