Sales of Vivus Inc's (VVUS.O) diet pill Qsymia failed to meet Wall Street expectations even as the company spent more to promote the drug, the first weight-loss pill to be launched in the United States in 13 years.
The drug maker's shares fell 5 percent in after-market trading to $11.87. The stock has lost more than half its value since the drug's launch in September.
A difficult reimbursement environment for obesity drugs and a restricted sales channel that allows Qsymia, Vivus' only commercial product, to be sold only through mail-order pharmacies has hit its uptake so far.
However, health insurer Aetna Inc (AET.N) and Express Scripts Holding Co (ESRX.O), the largest U.S. pharmacy benefits manager, have said they will cover Qsymia.
Chief Executive Leland Wilson hinted on Monday there may be more coverage for the drug in the near future.
"We are working diligently to achieve that and you can look forward to some significant progress on that, hopefully in the not too distant future," Wilson told analysts.
Insurance coverage remains critical for the drug, which is priced at about $160 for a month's supply.
Fourth-quarter sales of Qsymia were $2 million. Analysts had expected $3.1 million, according to Thomson Reuters I/B/E/S. Selling, general and administrative costs jumped more than eight-fold to $50.3 million.
"At this rate of spend, (Vivus) will need to raise cash in the next twelve to eighteen months," MLV & Co analyst Ed Arce said. He estimates the spend will move upwards as Vivus plans to launch a direct-to-consumer campaign this year for Qsymia.
Vivus ended the fourth quarter with cash and cash equivalents of $58.6 million.
To draw patients to its diet pill, Vivus also launched a free two-week trial offer called 'Get Started!' in November.
Chief Commercial Officer Michael Miller said on Monday that about 17,000 patients had participated in the program so far and about 70 percent of them had opted for a paid, second round of prescription.
The company also reported that Qsymia prescriptions jumped about 33 percent to 17,383 from January to February.
Quarterly net loss rose to $56.7 million, or 56 cents per share, from $11.5 million, or 13 cents per share, a year earlier. Analysts had expected a loss of 44 cents per share.
The company has no other drug on the market but is planning to launch its erectile dysfunction drug, Stendra, this year, after it received marketing approval from U.S. health regulators last April.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Saumyadeb Chakrabarty)