Vivus Inc. (VVUS:US)’s obesity drug Qsymia was covered by health insurers more often than anticipated in its first week on the market, which may help drive sales.
Vivus had said it didn’t expect health plans to agree to pay for the medicine, according to Andrew Berens, an analyst with Bloomberg Industries. Qsymia was covered about a third of the time in the week starting Sept. 21. Insurers paying for the Mountain View, California-based company’s treatment may boost use of Qsymia, since patients wouldn’t have to pay cash.
“This is definitely a major concern among obesity physicians; there was a lot of talk -- some wishful thinking maybe -- that there will eventually be reimbursement for drug therapy in obesity,” Simos Simeonidis, an analyst with Cowen & Co., said in a Sept. 24 note to clients.
Qsymia is the first new weight loss drug on the market in more than a decade and may generate as much as $1.1 billion a year by 2016, Berens said. It will take time for sales of the drug to solidify, and in the first week, only 106 prescriptions were written, according to the data compiled by Bloomberg.
Vivus climbed 4.3 percent to $18.57 at 10:24 a.m. New York time. The shares had increased 83 percent this year through yesterday.
Arena Pharmaceuticals Inc. (ARNA:US), based in San Diego, has its obesity own drug, Belviq, that was approved by U.S. regulators in June. Orexigen Therapeutics Inc. (OREX:US), based in La Jolla, California, is developing a therapy as well, which if approved will be sold under the name Contrave.
The obesity drug market probably will expand slowly, Simeonidis said in an interview, as patients and doctors learn more about the medications and who should take them. He attended the annual meeting of the Obesity Society in San Antonio last month, and spoke to physicians to gauge their interest. He found about 70 to 75 percent said they would prescribe Qsymia or Belviq, while the other 25 to 30 percent were more skeptical, he wrote in a note last week.
“The biggest demand I saw was from the obesity specialists,” Simeonidis said in an interview. “From the general practitioner perspective, they’re going to be slower to adopt.” He compared the market for these new obesity drugs to the early development of medication to treat depression.
“It was similar to the obesity space, in that obesity is seen as a lifestyle and motivation issue, and depression was seen like that by some people, and that has become a huge market.”
Only a segment of patients are likely to get the drugs, he said, with those looking to lose 5 percent or less of their body weight being advised to focus on diet and exercise. On the other end of the scale, those who want or need to lose 30 percent or more of their body weight probably would require surgery. Still, Simeonidis said some doctors told him they would put these patients on the medications for months prior to surgery to reduce the amount that needs to be removed.
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