Weight loss therapies may be highly needed or desirable, but it is the approval of health experts and insurer coverage that can make or break a brand. Vivus Inc (NASDAQ:VVUS
, VVUS message board
) saw an unexpectedly high support for its new Qsymia drug on its very first week on the market.
The company initially did not expect health care plans to play for the medicine, but it turns out Qsymia was covered in 30 percent of prescriptions. This may boost the appeal of the drug and make it the therapy of choice because of affordability.
The drug is in its very early stages of market acceptance, as only about 100 prescriptions were written in the week ending September 21st.
The expectation for the new drug, however, helped boost Vivus shares by 83 percent this year, to aroung $18.57 at Monday's closing, up 4.2 percent for the day.
The main competitor, Arena Pharmaceuticals (NASDAQ:ARNA
) had its own brand Belviq approved for sales at the end of June. Another drug is in the pipeline, coming from Orexicen Therapeutics Inc. (NASDAQ:OREX
The drugs are still new to health specialists and all the firms in the sector expect the sales to come slowly and to depend on government will to tackle the problem of obesity. Lack of political will and not seeing obesity as a social issue hampers Vivus's foray on the European market, as its therapy faces a blocking proposal from the European Commission.
The two drugs both promise high sales, as they could address obesity and related health issues, spread among more than a third of the US population.
Arena Pharmaceuticals stock fell last week by 8.17 percent, for a total September decline of 10.5 percent, closing on Monday at $8.31.
IMPORTANT VVUS UPDATE: October 2nd 2012 - VVUS is making a chart pattern that has been seen 10,375 times since the year 2000. 52.87% of the stocks that have made this pattern went up over 13% in a 20 day period. Watch the video to learn more about the probabilities of VVUS stock moving up or down.
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