Thathas to sting just a little....
VIVUS tumbles after firm says doctors may replace company's drug with generics
Anti-obesity drug maker VIVUS (VVUS) is sinking after research firm Jefferies downgraded the stock to Underperform from Hold based on its belief that doctors may prescribe two generic drugs instead of VIVUS's product. in a note to investors earlier today, Jefferies stated that VIVUS's anti-obesity drug, Qsymia, is a combination of two generic drugs, topiramate and phentermine. Since insurers are unlikely to cover Qsymia, doctors will have a strong incentive to prescribe the two generic drugs instead, the firm argues. While VIVUS contends that doctors will be reluctant to prescribe the generic pills for an off-label use, i.e. obesity treatment, due to liability concerns, Jefferies, after studying the matter, said it's "increasingly skeptical" about this argument. Finally, the firm, noting that VIVUS itself used the two generic pills during a proof of concept study, says data suggests that there's no material difference between the effectiveness of VIVUS' Qsymia and the two generic drugs. Jefferies reduced its estimate for peak Qsymia sales to $1.2B from $3.6B and slashed its target on the shares to $16 from $31. In early trading, VIVUS tumbled $1.51, or 6.63%, to $21.25.