Shares of Vivus Inc. plunged in premarket trading Wednesday after the drug developer said it absorbed a $5.8 million charge to write off unsold inventory largely from its initial production of the weight-loss drug Qsymia.
The Mountain View, Calif., company started marketing Qsymia last September, after it became the second long-term weight loss drug approved in the United States since 1999. Competitor Arena Pharmaceuticals received approval for its weight loss pill Belviq last June.
Many doctors have been asking for a new pharmaceutical treatment for weight loss as U.S. obesity rates have climbed. But Qsymia sales have disappointed in part because of limited insurance coverage and high out-of-pocket expenses for patients with coverage.
Qsymia also has only been available through mail order, but Vivus said Wednesday the FDA will allow some retail pharmacy distribution. The company expects to announce more on that in the third quarter.
Vivus said batches from the initial production of Qsymia had a shelf life of 24 months, and the company is applying to the Food and Drug Administration to extend that to 36 months for current and future production.
The company also said its selling, general and administrative expenses more than tripled in the first quarter to $44.7 million mainly due to Qsymia's commercialization.
Overall, the company lost $53.6 million, or 53 cents per share, on $4.1 million in Qsymia sales for the three months that ended March 31. That compares to $18.8 million, or 20 cents per share, in last year's quarter, when Vivus had no product revenue.
Analysts expected, on average, a loss of 50 cents per share on $5.2 million in revenue.
Company shares dropped about 3 percent, or 40 cents, to $11.64 in premarket trading Wednesday.