Jefferies Downgrades Vivus (VVUS) to Underperform On Generic Risk
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Price: $0.47 --0%
Rating Summary:
3 Buy, 6 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 13
Rating Summary:
3 Buy, 6 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 13
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Jefferies downgraded Vivus (NASDAQ: VVUS) from Hold to Underperform with a price target of $16.00 (from $31.00), citing generic competition.
"While investors have been primarily concerned about Qsymia patents, we believe that a bigger concern could emerge in the ability of physicians to prescribe generic topiramate and phentermine in lieu of Qsymia," analyst Thomas Wei states. "Our preliminary diligence suggests physician liability, VVUS' primary defense, is not a significant risk."
"There is a strong motivator for physicians to prescribe the two generics since branded Qsymia is unlikely to be covered by payors and the two generics will be more affordable for patients," Wei states.
Data suggest no material difference between Qsymia and a morning phentermine/evening topiramate regimen, he notes.
In addition, the analyst said after reviewing key literature on liability associated with off-label prescribing, as well as consulted with a Harvard physician/lawyer who has authored a NEJM editorial on physician malpractice risk related to drug prescribing, and "we are increasingly skeptical that the liability fear will remain a long-term barrier to generic uptake."
The analyst lowed peak sales estimates for Qsymia from $3.6 billion to $1.2 billion.
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 $22.76 yesterday.
"While investors have been primarily concerned about Qsymia patents, we believe that a bigger concern could emerge in the ability of physicians to prescribe generic topiramate and phentermine in lieu of Qsymia," analyst Thomas Wei states. "Our preliminary diligence suggests physician liability, VVUS' primary defense, is not a significant risk."
"There is a strong motivator for physicians to prescribe the two generics since branded Qsymia is unlikely to be covered by payors and the two generics will be more affordable for patients," Wei states.
Data suggest no material difference between Qsymia and a morning phentermine/evening topiramate regimen, he notes.
In addition, the analyst said after reviewing key literature on liability associated with off-label prescribing, as well as consulted with a Harvard physician/lawyer who has authored a NEJM editorial on physician malpractice risk related to drug prescribing, and "we are increasingly skeptical that the liability fear will remain a long-term barrier to generic uptake."
The analyst lowed peak sales estimates for Qsymia from $3.6 billion to $1.2 billion.
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 $22.76 yesterday.
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