Vivus Pharmaceuticals (VVUS) is having an absolutely awful day, with the stock down more than 13% after the company reported its Q4 results. The launch of its first-in-class obesity drug Qsymia was very highly anticipated among investors with the market potential being huge in this space, but sales just aren't panning out that way. The other major competitor in this space is a drug called Belviq from Arena Pharmaceuticals (ARNA), which was also highly anticipated and also disappointed in sales, though sales are better than Qsymia, despite being prescribed roughly half as frequently.
In this video, Motley Fool health-care analyst David Williamson points to Vivus' marketing tactics as one big problem for its sales. The company is offering Qsymia at a discount, with free initial doses followed by doses at $75 per month for up to 3 months. The percentage of free scripts were 23% total. David also looks at why management's suggestion that the poor sales are a seasonal problem doesn't make sense, and looks ahead to one other potential candidate that may finally win the war in the obesity space.