VIVUS Slashes Workforce as Obesity Market Shrinks
August 2, 2015
By Alex Keown, BioSpace.com Breaking News Staff
MOUNTAIN VIEW, Calif. – Due to a decline in the market, anti-obesity drugmaker VIVUS Inc. will trim some fat in order to remain competitive, the company announced July 30.
As part of a restructuring plan, VIVUS will eliminate employees and corporate expenses “with an objective of achieving neutral or positive operating cash flows by year-end 2016,” the company said. The San Francisco Business Times reported VIVUS had 94 employees in Mountain View and 115 sales reps through contract sales company PDI Inc. in early February. VIVUS cut 20 jobs in late 2013 and early 2014, the Business Times said. In April, VIVUS announced it would cut ts sales force by one-third, from 150 to 100. At the time of those layoffs, the company indicated that it was going to shift some of its focus to “high-value, consumer-focused digital media projects.”
VIVUS said it would terminate approximately 60 “job positions, including sales force personnel.” The terminations will take effect immediately. Because of the terminations, VIVUS said it will reduce its future sales forecast for the company’s lead prescription weight-loss drug Qsymia, which will result in excess inventory.
Although VIVUS has been bale to control costs throughout the first part of 2015, Seth H. Z. Fischer, VIVUS’ chief executive officer, said the anti-obesity therapy market had developed at a “substantially lower rate than expected.” The restructuring will allow the company to support Qsymia, although, he said the company will reduce the Qsymia sales force to fifty territories.
“We believe that this cost-saving restructuring is timely, prudent and consistent with evolving obesity market realities and the opportunity as it currently exists,” Fischer said in a statement.
The restructuring comes at a time when VIVUS is implementing a cardiovascular safety trial of Qsymia for the U.S. Food and Drug Administration. The study will cost VIVUS $200 million to $250 million, the Times reported.
dropped more than 12 percent Friday to $1.51 per share.
Despite the restructuring plan and layoffs, VIVUS reported revenue of $23 million in the second quarter, up from $21.9 million in the second quarter of 2014. The bulk of the revenue, $14 million, came from sales of Qsymia, the company said. The weight-loss drug earned $11 million in the same quarter of 2014. Approximately 152,000 Qsymia prescriptions were dispensed in the current quarter, compared to 138,000 in the second quarter of 2014.
Although sales of Qsymia grew in the second quarter, analysts said the drug comes in third behind competitors. Contrave manufactured by Orexigen Therapeutics is the top-selling drug and Arena Pharmaceuticals’ Belviq comes in second.
VIVUS lost $64.8 million, or 62 cents per share, on revenue of $55.15 million in the first half. That compares to a loss of $41.4 million, or 40 cents per share, on revenue of $58.6 million in first-half 2014.
In addition to its primary support of Qsymia, VIVUS said it is pursuing a commercial partnership for its erectile dysfunction drug Stendra (avanafil) in Latin America. The company said it plans to make an announcement about such an alliance soon. VIVUS has granted an exclusive license to Sanofi to commercialize avanafil in Africa, the Middle East, Turkey and the Commonwealth of Independent States, including Russia.
Sales of Stendra and Spedra, the name which Stendra is sold in the European Union, were $8.1 million in the second quarter, up from $5.7 million the year prior.