VIVUS, Inc. (NASDAQ:VVUS) Resumes Downtrend After Yesterday’s Rally

VIVUS, Inc.(NASDAQ:VVUS) shares opened lower by 1.26% after soaring 3% in the previous trading session. Recently, stock has seen selling pressure last after last Friday an analyst at an analyst at Jefferies slashed his sales estimates for company’s new obesity drug Qsymia.

Vivus Inc.'s new obesity drug Qsymia could create confusion among medical practitioners who may prescribe Qsymia's generic versions rather than drug itself for their patients.

Analyst Thomas Wei who pointed out this scope for error downgraded the firm's rating to Underperform from Hold and also slashed the price target of the stock to $16 from $31 a share.

Shares in Vivus fell nearly 8 percent on Friday after the downgrade and the concerns expressed by Wei.

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Wei said that confusion could cut into the sales of the drug and he estimated that sales of Qsymia would peak at $1.2 billion a year compared to the earlier forecast of $3.6 billion.

The U.S. Food and Drug Administration had approved the Qsymia on July 17, which was seen as more effective than two other anti-obesity pills which had been approved earlier. Qsymia would start selling later this year.

Qsymia is made of up two older drugs topiramate and phentermine, which has lost patent protection.

Vivus argued that most doctors are more likely to prescribe Qsymia instead of generic topiramate and phentermine because of concerns about their legal liability. Also patients who take the generic drugs may experience side effects and doctors would not like to take that risk.

However Wei said he was sceptical of the company's reasoning. He added the generics will also be less expensive and a combination of the two generic drugs appeared to be as effective as Qsymia in one clinical trial.