Orexigen Therapeutics, Inc. (NASDAQ:OREX) is still trying to get the FDA to sign off on Contrave, which the FDA believes increases cardiovascular risk. The drug is currently being evaluated in the Light study, which is a a multicenter, randomized, double-blind, placebo-controlled long-term research study for assessing the cardiovascular risks of Contrave. Orexigen Therapeutics, Inc. (NASDAQ:OREX) is the only company with multiple candidates for weight loss, its second candidate, Empatic has successfully completed Phase II trials and is ready for Phase III.
According to recent reports, the continuous lowering of the price is resulting in top line momentum for Qsymia. The FDA had originally placed a stricter restriction on the sales and distribution of Qsymia due to its higher health risks. The recent modifications to REMS have considerably improved the sales prospects of Qsymia; the drug is now available through retail pharmacies. On the other hand, the DEA scheduling of Belviq is being expected in the next few days, and it’s the ideal time for Qsymia to improve its distribution channel.
Loose restrictions
Since last year, VIVUS, Inc. (NASDAQ:VVUS) has been working with the FDA to modify the REMS (Risk Evaluation and Mitigation Strategy). The FDA has finally approved the amendments that VIVUS had been pushing for quite a while. Prior to these amendments, the anti-obesity drug Qsymia was available only through mail order pharmacies. Management has been blaming these sales restrictions for the slim sales figures of the drug.
This REMS modification will allow the company to distribute the drug through certified retail pharmacies all around the United States. The real challenge for management will be to shift the entire distribution network from mail order only to retail. An ideal situation in this regard would be to effectively transfer on the new system before Belviq can find a strong foothold in the industry.
The lifting of these restrictions is also an important reassessment opportunity for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and Orexigen Therapeutics, Inc. (NASDAQ:OREX) investors. That’s because these investors will now be in a better position to assess if the sales of Qsymia had been slim due to distribution restrictions, or if the demand had been miscalculated.
Improving sales
VIVUS, Inc. (NASDAQ:VVUS) has started a number of interesting programs to increase consumer interest in Qsymia. The Get Started! Program allows users to get a free 14 day prescription of the drug with a starting dose of 3.75 mg/23 mg. The Save Now! Program allows potential customers to buy the first 15 day worth drug for only $75 (recommended dose of 7.5 mg/46 mg), saving almost $85.
These aggressive sales techniques are improving the top line, but at the cost of profits. As the table below shows, the scripts are gradually improving and the lifting of sales restrictions should bring about further improvement.
| Month | January | February | March | Growth |
|---|---|---|---|---|
| Scripts | 16,733 | 18,417 | 23,812 | 37% |
Bottom line
The improvement in the scripts of Qsymia should be a good sign for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and Orexigen Therapeutics, Inc. (NASDAQ:OREX) investors. The true potential of Qsymia will be revealed once the company starts distribution of the drug through certified pharmacies as well. On the other hand, investors in the obesity market are waiting on the DEA scheduling and European approval of Arena’s Belviq.
The drug is still considered the safest and the most assured bet in the obesity segment. With the modification of REMS, the prospects of Qsymia have become much better and investors should expect scripts to further improve in the next couple of months.
The article Improving Prospects of This Obesity Bet originally appeared on Fool.com.
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