This Obesity Drug Hits the Market, but Check Your Expectations

VIVUS' (NAS: VVUS) Qsymia has hit pharmacy shelves first, beating Arena Pharmaceuticals' (NAS: ARNA) obesity drug Belviq, which has to wait for the Drug Enforcement Administration to sign off on its potential for abuse; and Orexigen's (NAS: OREX) Contrave, which isn't even approved yet since it's waiting for safety trial data.

Interestingly, VIVUS didn't issue a press release or make a big deal about the availability two months after it gained FDA approval. The availability was noted on Qsymia's website and in an SEC disclosure. Is that a sign of confidence, or is VIVUS trying to avoid hyping up investors' expectations? My guess is the latter.

VIVUS is launching without a partner. It has enlisted the help of a contract sales organization, PDI (NAS: PDII) , to hire 150 sales reps, but management of the sales force will be internal. That'll get the job done, but don't expect the same kind of well-oiled machine that a launch from a big pharma could provide.

Without a big direct-to-consumer campaign, the difference between a fast and slow launch will come down to doctors' enthusiasm for Qsymia. On one hand, there hasn't been a new obesity drug in many years. But doctors were burned by post-launch side effects of Abbott Labs' (NYS: ABT) Meridia and before that by Fen-Phen; I have a hard time seeing doctors putting most of their obese patients on Qsymia right after the launch. As with many drug for diseases that aren't immediately life-threatening, my guess is doctors will take a wait-and-see attitude, perhaps initially just prescribing to patients who ask for it.

That isn't to say Qsymia and Belviq can't be blockbusters. There's certainly a need, considering more than 35% of U.S. adults are obese. And the drugs work, Qsymia to a greater extent, but with more side effects.

But I think investors need to think a little longer term. Until doctors gain more confidence in the drugs and insurance companies decide to cover the drugs, sales are likely to be slow.

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