Q3 Earnings Report

VIVUS' (Nasdaq: VVUS) Nov. 5 third-quarter earnings release left shareholders shaken and stirred after Qsymia's initial sales were a far cry from what the market expected. The $41,000 from the new obesity drug's sales weren't anywhere near the target that analysts had set for its launch. While this number wasn't a surprise to everyone, the market reacted harshly to the news, and shares promptly dropped more than 20%.

This doesn't spell the end of VIVUS by any means, but the company will have to ramp up sales soon. Is there any hope on the horizon?

Insurance coverage

The lack of prevalent insurance coverage was one reason for poor sales. Roughly 80% of patients had to pay for their Qsymia prescriptions out of pocket, and the $160-per-month price tag was too steep for many. In fact, this cost was cited as the primary reason why 30% of patients who were given a Qsymia prescription actually didn't bother to get it filled.

Fortunately for VIVUS, insurance company Aetna joined the bandwagon – at least partially – late this month. The insurer modified its Clinical Policy Bulletin to include drugs such as Qsymia and Arena Pharmaceuticals' Belviq as "medically necessary" in the treatment of obesity. While this is certainly a step in the right direction, VIVUS investors should temper their excitement around this news. Not all of the insurance plans managed by Aetna will opt to cover obesity drugs, and VIVUS still has to work toward getting its drug covered by more insurance companies.

A new marketing strategy?

VIVUS sales' strategy until now has been to market primarily to physicians, but it recently took a page from the consumer marketing playbook and started a two-week free trial offer for Qsymia. We'll have to wait for next quarter's sales results to find out how effective this approach is, but this could be the start of a new marketing approach.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.