Vivus (VVUS) is getting more aggressive and creative with its efforts to get its anti-obesity drug Qsynmia more mainstream in the marketplace. Anti-obesity prescription drugs have a bit of controversy surrounding them and this year was the first time in over a decade that any prescription drug has been approved by the FDA. Vivus had Qsymia approved and Arena Pharmaceuticals (ARNA) Belviq. Vivus has its drug on the market already and Arena is awaiting DEA scheduling.
Leading up to FDA approval both Vivus and Arena were favorites of bio-tech speculators. Once approved by the FDA, both companies saw the stock prices soar as expectations rose and the status of possible blockbusters was assigned to each company.
With high expectations built in, it was with eagerness that the street awaited the Q3 conference call of Vivus for the first official statistics on sales. With just 5 weeks between launch and the quarterly report, there would not be a lot of data to work with, but the street was hungry for news.
When the first sales data for Qsymia was released it was not what analysts were expecting. Some 5,000 prescriptions had been written, well below what a blockbuster drug should deliver, at least vs. the high expectations of the street.
Vivus has not stood still. There are prescription hurdles, insurance hurdles, and clearly more marketing that needed to be addressed. Vivus has expanded the ability for mail order prescriptions, worked with insurance companies to cover the drug, and in its latest move, has come up with a free trial.
Monday, in an 8K, the company announced a new initiative to offer Qsymia to qualified consumers on a free trial basis. The program is called "Get Started!" and in my opinion is a great way for Vivus to establish market share prior to competitor Arena entering the market with Belviq, as well as to get consumers to seek out treatment rather than relying on doctors to suggest it.
On November 19, 2012, VIVUS, Inc., or the Company, initiated the Qsymia TM Get Started! Free Trial Offer Program. The Company is offering eligible patients a Free Trial Offer on a valid prescription for up to a 14 capsule quantity of the Qsymia Starting Dose, 3.75 mg/23 mg (phentermine and topiramate extended-release). Eligible patients are able to receive up to 14 capsules of Qsymia Starting Dose free, including standard shipping and handling charges.
For a patient to qualify for the Get Started! Free Trial Offer Program, they must meet the following eligibility criteria: reside in one of the 50 states, Puerto Rico, Virgin Islands, or Guam and be 18 years or older. This offer is not insurance and is not valid for prescriptions purchased under Medicaid, Medicare or similar federal or state programs or for patients who are Medicare eligible and enrolled in an employer-sponsored group waiver health plan or government-subsidized prescription drug benefit program for retirees. This offer is not valid where prohibited by law, taxed or restricted, and this offer is limited to one per patient for the duration of the program.
This program is only available through CVS mail order and Walgreens mail order pharmacies that are part of the Qsymia Home Delivery Network. Healthcare providers and patients will be notified of this program through several communication routes, including being prominently displayed on Qsymia.com.
It could certainly be debated that the move is defensive in nature because of what has now been viewed as mediocre sales figures in the first 5 weeks. I disagree. This move is one that gets the product exposed to consumers and given the limit of 14 pills, does not eat away at the bottom line in a massive way. In my opinion the trial program is a brilliant marketing move as Vivus paves the way in the new anti-obesity prescription market.
At this point the company needs to show sales and a number of prescriptions that satisfies the modified expectations of the street. With "Get Started!" Vivus may be able to exceed expectations now and establish a pathway for expectations to be more realistic.
Many of the hurdles Vivus needs to negotiate in being first to market also benefit Arena. Getting insurance companies to cover an anti-obesity drug is an example of that. When Aetna (AET) announced that it would cover Qsymia, it also announced coverage for Belviq when it launches. This move is all about Vivus. While the benefits of this move to the stock are longer term, the immediate benefit will be more patients giving Qsymia a try.
From a pure investment standpoint, free trials may seem like desperation, but it is a reality of business today. If Vivus can get patients through the door and trying its product there will be longer term patients in the pipeline that otherwise might not have been. If more insurance companies follow the lead of Aetna, this program will benefit even more.
The next big date to watch with Vivus is December 4th. The company will be presenting at the Deutsche Bank dbAccess BioFEST. The company will have just shy of three months of data since the launch of Qsymia at that point, and perhaps the results will quell the concerns of the street.
Disclosure: I am long ARNA.
Additional disclosure: I have no position in Vivus