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Spencer Osborne is founder of Satellite Standard Group [SSG], and a partner of Sirius Buzz (http://siriusbuzz.com/). Sirius Buzz covers the satellite radio industry as well as companies that do business in this sector. Sirius Buzz provides information and opinion to readers with an interest in... More
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  • Vivus Adds Celebrity Flair 1 comment
    Mar 19, 2014 6:18 PM | about stocks: VVUS

    Vivus (NASDAQ:VVUS) announced today that the company will be working with Shari Belafonte to educate Americans about seeking solutions for chronic weight management when diet and physical activity alone have not been successful. In addition, the campaign will address weight related health issues such as cholesterol an diabetes.

    Belafonte is said to have reached her weightloss goals by working with her doctor, proper diet, exercise, and the use of Qsymia. Belafonte was able to lose 10% of her weight and stated that she feels healthier as a result.

    Another celebrity that has used Qsymia with success is Chaz Bono. Chaz lost an impressive amount of weight and the photos show that quite clearly.

    The use of celebrities in weight loss has had its ups and downs. The benefit of using a celebrity is obvious. Name recognition and endorsement can be huge. The drawback is that a celebrity may eventually put weigh back on, which is not the image many companies want to portray.

    It appears that Vivus is being somewhat careful here. The thrust of the campaign is chronic weight management. In essence, it would appear that the company is leaning toward the fact that Qsymia can be used to take off weight and then used when needed to maintain that weight loss. One drawback and criticism of many potential weigh loss solutions is that they are temporary. Qsymia has been on the market for a bit over a year, so the proof of lasting weighloss can not yet really be established.

    Vivus competitor Arena Pharmaceuticals (NASDAQ:ARNA) is rumored to be starting television ads in the next 4 to 6 weeks for its drug Belviq. At this point Arena's marketing partner Eisai has not given indication as to whether a marketing campaign will make use of celebrity endorsement. My understanding is that the initial campaign will not use celebrities.

    Vivus sales have been very flat all year. According to industry tracker IMS health, the weekly sales have hovered in the 10,000 to 11,000 prescription range for quite some time. Competitor Arena has seen its sales trend with modest weekly growth since the beginning of the year. In essence, Qsymia has been losing market share to Belviq throughout 2014 and neither company is seeing massive traction. A third competitor may come from Orexigen (NASDAQ:OREX), which is currently under application for its anti-obesity drug Contrave with the FDA. A decision on Contrave is expected in June of this year.

    The challenges for the whole prescription weightloss sector have been numerous. The potential market in the United States could be as high as 100 million people. The issue is that insurance companies have not been quick to cover these medications, and many that do still have these drugs on tiers that still make it expensive for consumers. Doctors have still not embraced the concept of a weight loss pill as a first line solution. For every doctor you find that is willing to write a prescription you can find one that is not. Doctor education programs are ongoing, but it can be a long and tedious process. From an equity standpoint it is a matter of how long an investor wants to wait to see the market appreciate these drugs.

    In 2013 Vivus revenue on Qsymia was about $24 million, while Arena (on the market since June 7th of 2013) had revenue of $5.7 million. Vivus is marketing Qsymia by itself. Arena has a marketing partner in Eisai (OTCPK:ESALY), and Arena gets 31.5% of net sales.

    With Vivus announcing that Shari Belefonte will be a spokesperson of sorts, and Arena getting ready for television ads, the sector may get some Wall Street love in the second half of 2014. There are a lot of eyes watching these equities, so interesting times are still ahead. In addition to Qsymia, Vivus is marketing an erectile dysfunction drug that appears to be gaining traction. Stay Tuned!

    Disclosure: I am long ARNA.

    Additional disclosure: I have no position in Vivus, Orexigen, or Eisai

    Stocks: VVUS
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  • healthythoughts
    , contributor
    Comments (2988) | Send Message
     
    Hoping for a "Shari" pop for Qsymia!

     

    "ED Stendra gaining traction"...thanks for that good news!

     

    As always, thanks for the updates
    23 Mar 2014, 09:24 PM Reply Like
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