Sector Snap: Obesity drugmakers Vivus, Arena slip
NEW YORK (AP) — Shares of Vivus Inc. continued to slump Monday on concerns that its obesity drug Qsymia won't get approved in the European Union, and analysts took diverging views on Vivus and its competitors.
Analysts surveyed the market for new weight-loss drugs following a meeting of the Obesity Society, a group of scientists who study the condition. Cowen & Co. analyst Simos Simeonidis said he believes physicians have a positive view of several new and experimental weight loss drugs, and that most physicians he spoke to are willing to prescribe Qsymia and Arena Pharmaceuticals' drug Belviq as soon as they are available.
Credit Suisse analyst Lee Kalowski said it's hard to gauge how strong initial sales of Qsymia and Belviq might be.
Vivus said Friday that it believes a European Union regulatory panel will vote against approving Qsymia, and based on the company's commentary, Kalowski said he believes Qsymia might not be approved in Europe until 2015. He said Vivus' appeal is unlikely to succeed, but he believes the company may be able to gain approval after conducting a new study on the cardiovascular side effects of Qsymia. Kalowski said the company could get results from that study in 2014.
He previously expected EU regulators to approve Qsymia in 2013. The drug will be known as Qsiva if it is approved in the EU. Kalowski cut his price target on Vivus stock to $29 per share from $34.
Shares of Vivus lost $1.88, or 8.9 percent, to $19.12 in afternoon trading. The stock dropped 11.5 percent Friday and shares are now trading at their lowest price since late February, just after an FDA advisory panel said Qsymia should be approved.
Kalowski wrote that early sales of Qsymia and Belviq could be slow because Vivus, Arena, and Arena's partner Takeda Pharmaceutical are launching the drugs with small sales forces and no direct-to-consumer ads. It will also take time for Medicare and Medicaid to start covering the drugs, he added.
Simeonidis wrote that doctors are excited about the products and say they will be a useful option. He said most physicians at the conference were willing to prescribe both drugs as soon as they are available, though the majority felt that Qsymia is more effective than Belviq, and most believed that Qsymia, Belviq, and Orexigen Therapeutics Inc.'s experimental drug Contrave will all be effective for patients with diabetes.
Vivus launched Qsymia earlier this month, and Arena and Takeda plan to start marketing Belviq in early 2013. The two drugs were approved during the summer.
Arena Pharmaceuticals Inc. shares dipped 36 cents, or 4 percent, to $8.68. Orexigen Therapeutics stock gave up 18 cents, or 3.2 percent, to $5.44.
