Vivus Weight-Loss Drug Launch In Early Trouble (Updated)

Updated with new information.

MOUNTAIN VIEW, Calif. (TheStreet) -- Vivus (VVUS)provided investors with the first detailed looked at the commercial launch of the weight-loss pill Qsymia on Tuesday. The picture painted wasn't pretty.

Qsymia sales in the third quarter totaled $41,000 well below the analyst consensus estimate of $310,000. Vivus gets a pass on the September quarter, however, because Qsymia was only available for 10 days.

In the six weeks of the Qsymia launch to date, 3,504 patients are currently on Qsymia, Vivus reported. The average monthly price for a 30-day supply of Qsymia is $160, the company added.

Do the math: If all 3,504 patients remain on Qsymia, sales in the fourth quarter would total $1.7 million. More patients will start Qsymia as the fourth quarter progresses and add to total revenue, of course, but at this point, it seems almost impossible for Vivus to meet analysts' consensus estimate of approximately $24.3 million for the December quarter, according to Bloomberg.

Some analysts have already started cutting their Qsymia forecasts, others will most certainly do so now. Minutes after Vivus' call ended, Lazard Capital cuts its 2013 Qsyma sales projection to $80 million from $204 million. Investors had already clued into the poor Qsymia launch, with Vivus shares falling 30% since in mid-October.

Vivus shares fell another 21% to $11.83 in Tuesday trading.

On its conference call, Vivus said 30% of patients who are prescribed Qsymia by a doctor are choosing not to pick up their prescriptions due to the out-of-pocket cost. This high rate of prescription abandonment is a concern the company is taking very seriously, said Vivus chief commercial officer Mike Miller.

At present, about 20% of patients are receiving insurance reimbursement coverage for Qsymia with an average co-pay of $60 per month. Vivus expects insurance coverage to grow to about 30% one year into the drug's launch.

Vivus executives stressed that Qsymia was still in the early stages of its commercial launch and that selling a new weight-loss pill was a challenge. "We look at it as the launch of a brand new category with very little support and education going on," said Miller.

With regards to Stendra, Vivus's erectile dysfunction pill, Vivus said it was making "good progress" on talks with potential partners to launch the drug in the U.S., Europe and the rest of the world. However, the FDA approved Stendra in late April.

Vivus lost $40.4 million, or 40 cents per share, in the third quarter.

Weight-loss pill competitor Arena Pharmaceuticals (ARNA) reports third-quarter results after Tuesday's market close. Arena is expected to launch its pill, Belviq, early next year.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.