MOUNTAIN VIEW, Calif. (AP) -- Vivus Inc. said Tuesday that it has secured a $110 million financing arrangement with an investment fund to help promote its weight-loss drug Qsymia.
The Food and Drug Administration approved Qsymia in July, and Vivus started selling the drug in September. Analysts predicted that sales would eventually reach billions of dollars per year, but early sales have been disappointing because of limited insurance coverage and high copays. Qsymia also can't be dispensed at pharmacies and is available only through mail order.
Vivus has been trying to boost sales with supply agreements and a free trial program for prospective patients, and it is negotiating with regulators about allowing the drug to be dispensed at certain pharmacies. Vivus said last month that the Food and Drug Administration will make a decision on the pharmacy application in April.
Vivus said Tuesday that under the terms of the royalty financing arrangement, the company will make an initial draw of $50 million and will have the option to draw an additional $60 million any time before the end of the year. The investment fund providing the financing is managed by Pharmakon Advisors.
The company said the financing provides it capital for continued commercialization of Qsymia and other corporate activities.
Vivus will make no payments for the first year and repayments will begin in the second quarter of 2014 and end in the second quarter of 2018. The payments will be capped based on a percentage of future net sales of Qsymia.
Shares of Vivus fell 33 cents, roughly 3 percent, to $10.61 by midday. Its stock is nearing the bottom of its 52-week trading range of $9.86 to $31.21.