4 Min Read
* 2nd-quarter loss bigger than expected
* CEO Zook says personally involved in partnering discussions
* Shares fall 4 pct after market close
By Zeba Siddiqui
Aug 6 (Reuters) - Vivus Inc's new CEO plans to keep a tight lid on costs and focus on rolling out the company's diet pill via retail pharmacies in the next two quarters, after the product's sales missed analysts' estimates for the fourth quarter in a row.
In his first public comments since taking the top job at Vivus, Zook said overcoming barriers to patients' access to the diet drug, Qsymia, will be among the company's top priorities in the next few months.
As part of that strategy, Vivus does not plan on launching an expensive direct-to-consumer campaign for Qsymia in the near term, said Zook, who was picked as CEO by the company's largest shareholder First Manhattan Co after a bitter proxy battle that also brought about a board shuffle last month.
"Trust me, I've been at this game for a number of years and understand the role that an activated consumer can play," the former AstraZeneca Plc executive told analysts on a post-earnings conference call.
Zook, who was executive vice-president for global commercial operations at AstraZeneca until February, helped launch the multibillion-dollar cholesterol medicine Crestor, among other blockbuster products.
"Where we stand today with the retail channel and our commercial access, I just don't think (a DTC campaign) would be a good use of our overall spend," Zook said.
Vivus has had a patchy year marked by a 40 percent fall in its stock price, mainly due to weak sales of Qsymia, the first weight-loss treatment to be approved in 13 years amid a U.S. obesity epidemic.
The tepid launch in September drew shareholder criticism against Vivus's marketing strategy, and was also the main reason for First Manhattan's coup against former management.
Qsymia, whose side effects include heart risks and the possibility of babies being born with oral clefts when taken by women during pregnancy, has faced a tough reimbursement environment that was frequently cited by former CEO Leland Wilson for the drug's slow sales growth.
Qsymia is being sold through 10,000 certified retail pharmacies, Vivus's commercial head Michael Miller said.
The company's April-June net product revenue, reflecting Qsymia sales, was $5.5 million, compared with $4.1 million in the quarter ended March. This was well below analysts' average estimate of $12.8 million, according to Thomson Reuters I/B/E/S.
Finding a commercial partner and overhauling Vivus's marketing practices were among some of the promises First Manhattan made as it installed Zook as CEO and six new members on Vivus's board last month.
Zook reiterated those promises at the call, saying he and the board were personally involved in discussions with large pharmaceutical companies to increase Vivus's commercial muscle.
Zook will also have to tackle increased competition. Rival Arena Pharmaceuticals Inc launched its obesity pill in June, ending Qsymia's exclusivity as the first new weight-loss pill To hit the U.S. market in more than a decade.
Vivus second-quarter net loss widened to $55.5 million, or 55 cents per share, from $24.0 million, or 24 cents per share, a year earlier. This was bigger than the average analyst estimate of a loss of 44 cents per share.
The loss also included a charge of $2.8 million related to the proxy contest and $4.4 million for Qsymia inventories, Vivus said.
Total operating expenses of about $57 million were flat compared with the first quarter.
Vivus was left with about $358.3 million in cash, cash equivalents and available-for-sale securities at the end of the quarter, compared to $214.6 million at the end of December.
Vivus dispensed about 81,000 Qsymia prescriptions in the quarter, up about 37 percent from the first quarter. The company said Qsymia weekly prescription trends were on the rise, according to early third-party data.
Vivus shares fell about 4 percent in after-market trading after closing at $14.73 on the Nasdaq on Tuesday.