Vivus Offers Q4 Results - Qsymia Gaining Traction

| About: Vivus, Inc. (VVUS)
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Vivus (NASDAQ:VVUS) announced its Q4 results Monday after the close. The company carried a focus on the anti-obesity drug Qsymia which just completed its first full quarter of results. The company reported a substantial loss of $56 million which was greater than what the Street expected.

Vivus did offer some favorable signs regarding Qsymia that actually relates to the current quarter rather than the last. Vivus is working closely with the FDA to gain a modification to the REMS requirements associated with the drug. Specifically, Vivus is working to expand the distribution channel to certified pharmacies in addition to the mail order process that is currently required. Vivus indicated that it is anticipating the REMS modification to be in place during the second half of the year.

While sales of Qsymia have not reached blockbuster status, there is continued growth. Much of that growth is attributable to the free trial program the company initiated in mid December of 2012. According to data released by the company, the number of scripts in various periods is as follows:

4 weeks ended October 24, 2012 - 5,394

4 weeks ended November 23, 2012 - 7,749

4 weeks ended December 22, 2012 - 12,978

4 weeks ended January 18, 2013 - 13,037

4 weeks ended February 15, 2013 - 17,383

The company reports that some 57,000 scripts have been written. It is obviously growing and investors need to bear in mind that the free trial program (launched 12-18-12) has been in effect only for the January and February numbers.

Vivus has expressed that the free trial program is responsible for about 33% of the scripts written in the February period. The company also disclosed that about 70% of patients that participate in the free trial become a paying subscriber. The network of doctors able to write scripts of Qsymia is at 12,000.

While the Q4 numbers did offer disappointment, we can see better and more steady growth in the Q1 numbers disclosed by the company. Clearly, the drug has some traction, and the free trial program is making a meaningful difference.

The revenue of $2 million in Q4 was on roughly 26,000 scripts written. This means that roughly 31,000 scripts are attributable to Q1 of 2013. We could see the revenue line in Q1 see a nice jump, as the company has already surpassed the Q4 total in scripts at the halfway point.

Vivus competitor Arena (NASDAQ:ARNA) is getting ready to launch its anti-obesity drug Belviq and these numbers from Vivus should be encouraging for investors in that equity. While the numbers do not seem huge, it is important to monitor and keep tabs on growth rate. Arena is scheduled to release its Q4 financials on March 4, 2013.

Vivus stressed that insurance coverage is a key factor in acceptance of an anti-obesity pill. The company stated that, on average, when a patient has the assistance of insurance, the co-pay is between $50 and $60. Treatment with Qsymia, at current pricing levels, is less expensive than Arena's Belviq. Pricing will be a big factor for investors to watch.

Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I have no position in Vivus.