I must say that I have been impressed by the recent results in prescription sales Vivus' (VVUS) anti-obesity drug Qsymia has had over the past four weeks. In the beginning of July, the drug became available for the first time in the retail channel at about 8,000 brick and mortar pharmacies.
Though script sales are still far short of what is needed to call the drug a success, the company seems to be finally making strides. Initially Qsymia was only available through certified mail-order pharmacies due to some REMS restrictions placed on the drug in agreement with the FDA. The "No-Retail" restriction was lifted in the Spring, and now another restriction of sorts is being lifted.
Vivus can now engage in what is called Direct To Consumer [DTC] marketing. When a new drug hits the market there is a period of time when the drug can not be marketed directly to consumers. Typically this restriction goes away in about six months, but with Qsymia it was a year.
The thought process on avoiding DTC campaigns is that it gives time for pharmaceutical reps to go through the process of introducing the drug to doctors. Doctors are the ones that write prescriptions, so the concept is very sound. It makes little sense to advertise a drug that a doctor knows little or nothing about and then have consumers walking into the office and requesting that a prescription be written.
As I was searching through the web, I cam across an advertisement for consumers. Outside of Google searches, this is the first time that I had experienced a DTC ad for the drug. It was a banner ad placed at the top of the page. This is the most valuable advertising real estate and typically generates more click-throughs than other ads.
For overweight and obese consumers, this may be the first exposure that they have to Qsymia. For investors, the story may get really impressive.
The reason investors will want to pay close attention is simple. Up until now, Qsymia has not been a household name. Investors have heard about it, doctors have heard about it, and a small segment of the population taking the pill has heard about it. When Direct to Consumer advertising starts, the name recognition begins to embed itself into consumers. Repeated exposure leads to people expressing interest. When someone expresses interest, they may well decide to try the product and could request it by name. That is big.
The Direct to Consumer advertising is in its infancy stages right now. As yet, I have not seen it on television or heard about Qsymia on radio. That may not be too far off. This could lead to the attention the anti-obesity sector needs. In fact, whether you are invested in Vivus, Arena (ARNA) with Belviq, or Orexigen (OREX) with the not yet approved Contrave, you should be excited by this development.
Big challenges in the anti-obesity space are consumer awareness and insurance coverage. Sometimes consumer awareness can help drive the bus toward broader insurance coverage. With better insurance, more revenue gets to the bottom line, and the less consumers will need to worry about the costs of these drugs.
I anticipate that, as the DTC campaign heats up, that we will see better trends in script numbers for both Qsymia and Belviq. That is exactly what both of these companies need right now, as script sales to date have been more modest than many anticipated. Arena's Belviq should see DTC campaigns start as early as the first week in December. Stay Tuned!