Express Scripts (ESRX) Deal is Huge Win for VIVUS (VVUS); Qsymia Reimbursement Will Improve

December 24, 2012 10:36 AM EST
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Price: $1.19 -0.83%

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    4 Buy, 8 Hold, 5 Sell

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VIVUS, Inx. (Nasdaq: VVUS) is heading in the right direction on the holiday-shortened trading session Monday following bullish comments over Qsymia reimbursement.

According to JPMorgan analyst Cory Kasimov and his team note the disclosure last week that Express Scripts (Nasdaq: ESRX) would be adding Qsymia to its national pharmacy formularies which following a favorable bulletin published by Aetna (NYSE: AET) and the addition of Wal-mart (NYSE: WMT) to its home delivery network. Of the three, Kasimov sees the Express Script's deal as the most meaningful.

On distribution, Kasimov expects "a decision from the FDA on enabling a more traditional retail channel by mid-April."

The average out-of-pocket costs should also drop substantially, from a current rate of $160 per month for those without coverage down to a more manageable $50 to $60 per month for those covered. Management has previously said that only 20 percent of prescriptions are covered by a third party, leading to an average co-pay of $62.

As of early November, 30% of intended (not shipped) scripts were abandoned given the high cash outlay, Kasimov noted. Formulary additions should help to resolve this early dynamic.

Overall, Kasimov sees the reimbursement momentum to continue. He expects resolution of REMS no later than the middle of April for an October-submitted proposal.

VIVUS shares are 1.4 percent into positive territory. JPMorgan maintains an Overweight rating on VIVUS.

For an analyst ratings summary and ratings history on Vivus click here. For more ratings news on Vivus click here.

Shares of Vivus closed at $13.42 yesterday.

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