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VVUS: Qsymia Receives an FDA Letter

By John Vandermosten, CFA

NASDAQ:VVUS

On May 22nd, the FDA issued a letter to Vivus (VVUS) claiming that the company had made false or misleading claims and/or representations about the efficacy and risks of Qsymia. The letter appears to have been picked up by the market following the close of trading on May 29th. Based on observations by the Office of Prescription Drug Promotion (OPDP) of the FDA, it has found that the promotional material on the webpage violated the Federal Food, Drug and Cosmetic Act (FD&C Act) and is requesting that Vivus halt its violations. The OPDP requests that Vivus to submit a written response that the company intends to cease (remedy) the violations by June 7th, 2019, listing all promotional materials that include the cited violations along with a plan on how they discontinue their use.

The identified claimed violations by the OPDP are:

‣ Misleading claims about efficacy
◦ Promotional materials on the website claim that Qsymia can help patients lose weight 3 times faster than diet and exercise alone.
◦ Clinical studies were not designed to measure the rate of weight loss as an endpoint of the study but rather the amount of weight loss
‣ Misleading claims about weight loss expectations
◦ Promotional materials claim that patients can lose specific amounts of weight and inches off of their waist over certain periods of time.
◦ Claims do not explicitly state that results were achieved with Qsymia in conjunction with a reduced-calorie diet and increased physical activity.
◦ Claims do not include baseline weight and waist circumference, which are relevant for determining absolute numbers cited.
◦ Claims do not note that some patients did not complete the study which may have overstated the efficacy of the product.
‣ Failure to prominently present information related to contraindications, warnings, precautions, and adverse reactions.
◦ Risk information is included at the bottom of the page is “in paragraph format and not easily accessible to viewers”

Vivus has stated that they intend to comply with the requests and reply by next Friday’s indicated deadline. The FDA has several actions it can take if Vivus fails to comply, something we do not see as likely. These include legal action against the company, seizing supplies of the drug, a court-ordered ban on specific activities and criminal charges. Despite all of these concerning outcomes in an extreme case, we see the indicated violations as minor and easily corrected. We anticipate Vivus will address the request, and following Vivus’ compliance and response, no further action.

The elements listed by the OPDP illustrate the difficulty of conveying a succinct message about what a certain drug can achieve and engender further interest without losing the audience in the minutia. While the terms “false or misleading claims and/or representations” can startle investors, we see the concerns raised as easily fixed with little impact on marketing effectiveness and see no negative action on the part of the OPDP or FDA.

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