Contrave Prescriptions Still Rising In A Down Week

| About: Orexigen Therapeutics, (OREX)
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Summary

Total prescriptions for Contrave was up 10%, while Belviq and Qsymia were down around 5% each.

Combined, the trio produced a flat week, an improvement on last year, when Belviq and Qsymia combined were down 5%.

Contrave's performance maintains a projected 100,000 total prescriptions for Q1 2015.

On Friday, the marketing authorisation application (or MAA) for weight loss drug Contrave/Mysimba was recommended by the Committee for Medicinal Products for Human Use (or CHMP) for use in all European Union member states as an adjunct to a reduced-calorie diet and physical activity. Based on the CHMP's opinion, the European Commission will make the final decision on the MAA. Finally, pricing and reimbursement will be determined by each country's national health system. In Europe, the rate of obesity ranges between 8.0% and 23.9% for women and 7.6% and 24.7% for men, but this data hasn't been updated since 2009. Romania accounted for the lowest percentages in both genders; on the other hand, it has the highest proportion of overweight people (35.9% in women, 49.9% in men). This comes on the heels of Thursday, when the European Court of Justice ruled that obesity may be a disability. While the case was about a worker with a claim for getting fired on grounds of discrimination, the verdict means employers will have an "active obligation" to cater to the needs of their obese employees, which may include treatment with weight-loss medication. These are excellent developments for Orexigen (NASDAQ:OREX), which owns the rights for Contrave/Mysimba in Europe. Orexigen has licensed Contrave rights to Takeda (OTCPK:TKPHF) to market in North America. Previously, the CHMP had twice declined the MAA for Qsymia from Vivus (NASDAQ:VVUS) in 2012 and 2013, while Arena (NASDAQ:ARNA) withdrew its MAA for Belviq. Back on the U.S. side, new prescription numbers have been released by IMS for Belviq, Qsymia and Contrave. This week is flat in the sector (see Table 1), with the 3 products declining 2.97% in total prescriptions week to week (27,155 vs. 27,987).

Table 1. Total and New Prescriptions

Belviq

Qsymia

Contrave

Combined

Week Ended

Total

New

Total

New

Total

New

Total

New

11/21/2014

11919

8637

10837

7611

3965

3922

26721

20170

Weekly Change

-2.40%

-3.70%

-3.30%

-4.10%

72.70%

72.00%

3.91%

5.13%

11/28/2014

9264

6241

9005

6125

3347

3265

21616

15631

Weekly Change

-22.28%

-27.74%

-16.91%

-19.52%

-15.59%

-16.75%

-19.10%

-22.50%

12/5/2014

11652

8066

10923

7288

5412

5283

27987

20637

Weekly Change

25.78%

29.24%

21.30%

18.99%

61.70%

61.81%

29.47%

32.03%

12/12/2014

10762

7618

10385

7097

6008

5844

27155

20559

Weekly Change

-7.64%

-5.55%

-4.93%

-2.62%

11.01%

10.62%

-2.97%

-0.38%

Starting when the FDA allowed Qsymia to be sold in retail pharmacies starting July 1 last year, the chart for Qsymia appears to have plateaued, while the number total prescriptions for Belviq overtook Qsymia's on the week ending August 8 and is steadily pulling away (see Figure 1). Contrave … There are multiple possibilities for this dynamic, which were discussed in a previous article. In brief, Takeda and Arena's marketing partner Eisai (OTCPK:ESALY) have more sales reps, 900 and 600 versus the 150 of Vivus. Eisai also engages in direct-to-consumer advertising (DTCA), while Takeda offers the most generous pricing among all three, including a $60 maintenance price for cash patients. Vivus is financially unable to hire more reps or launch a DTCA effort. However Qsymia (and Belviq) still enjoys better insurance coverage than Contrave from the largest insurers.

Figure 1. Total Prescriptions by Week

Data from Symphony (2013) or IMS (2014)

Contrave is building a strong launch, with a weekly increase of 11% and 51.5% from the week before Thanksgiving. It would be simplistic to conclude from this week's numbers that Contrave's advancement was at the expense of the other two, because Belviq and Qsymia's numbers are both still higher than last year at this time. Currently, Contrave's numbers put in around half a year ahead of Belviq (see Table 2).

Table 2. Total Prescriptions, Belviq vs. Contrave, Weeks Into Launch

Belviq

Contrave

Week

Ending

New Rx

Change

Week

Ending

New Rx

24

11/22/13

5258

6.8%

5

11/21/14

3965

72.7%

25

11/29/13

3854

-26.7%

6

11/28/14

3347

-15.6%

26

12/06/13

4787

24.2%

7

12/05/14

5412

61.7%

27

12/13/13

4539

-5.2%

8

12/12/14

6008

11.0%

28

12/20/13

4640

2.2%

29

12/27/13

3180

-31.5%

30

01/03/14

3851

21.1%

31

01/10/14

4775

24.0%

32

01/17/14

5079

6.4%

33

01/24/14

5186

2.1%

34

01/31/14

5190

0.1%

35

02/07/14

5709

10.0%

36

02/14/14

5766

1.0%

37

02/21/14

6356

10.2%

38

02/28/14

6690

5.3%

39

03/07/14

6667

-0.3%

40

03/14/14

7045

5.7%

41

03/21/14

7096

0.7%

42

03/28/14

7132

0.5%

It is too early to foretell how far Contrave's progress will continue, as even 10% weekly improvements cannot be sustained for long. At minimum, following in Belviq's path should be attainable. Vivus reported a -2% decrease in cumulative prescriptions between Q1 2014 and Q4 2013. Assuming Qsymia follows last year's trajectory (very likely), and Belviq does the same steady growth (likely, because Eisai has a 50% larger sales force from fall 2013), projections ending in March may look like Figure 2.

Figure 2. Projected Total Prescriptions by Week

The following is a breakdown of the estimated number of prescriptions to be filled in Q1 2015, for week ending March 27, and year-over-year and quarter-to-quarter comparisons:

Qsymia: 133,000, 11,310, +7%, -1%

Belviq: 182,000, 16,914, +218, +23%

Contrave: 101,000, 9,442, -, +198%

Combined: 416.000, 36,659, +130%, +32%

Investors may mull over the reasonableness of the projections. The above model for Contrave appears a little conservative and assumes 4,200 prescriptions during Christmas (compared to 3,180 for Belviq in its 29th week); it is 70% likely these numbers will be surpassed. If Contrave reaching 5 digits seems implausible, consider that Belviq and Qsymia had to contend with patients facing *higher* costs after their initial free or discounted fill. Under Takeda's Direct Save program, Contrave patients pay the same for the second month, then $10 lower from the third month on. Refill numbers for Belviq and Qsymia are consistently 25-35% of total scripts. Therefore, even if Contrave's new scripts remain at 6,000, that kind of refill rate will push totals to almost 8,000 in a month.

Disclosure: The author is long OREX, ARNA.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.