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VIVUS Settles with Teva on Weight Management Drug Generic

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VIVUS, Inc. announced that it has entered into a settlement agreement with Actavis Laboratories, a subsidiary of generic company Teva Pharmaceutical Industries Limited (TEVA - Free Report) , thereby resolving a three-year old patent litigation related to its weight management drug Qsymia. Shares of VIVUS were up more than 1% in after-hours trading on Wednesday as the resolution removes a major overhang for this small biotech.

So far this year, shares of VIVUS are up 7%, which compares unfavorably with an increase of 8.1% registered by the Zacks classified Biomed/Genetics industry during this period.

Actavis was looking to launch generic versions of Qsymia. Per the settlement agreement, Actavis has been allowed to sell a generic version of Qsymia on Dec 1, 2024, or earlier under certain circumstances. In case, Actavis chooses to launch at-risk, i.e. earlier than the agreed date, it will be entitled to pay VIVUS a royalty on sales of the generic.

The litigation was pending in the U.S. District Court for the District of New Jersey since 2014.

Indian pharma comapny, Dr. Reddy's Laboratories Limited (RDY - Free Report) is also looking to bring a generic version of Qsymia to market. The litigation is still pending in the U.S. District Court for the District of New Jersey.

While Qsymia was approved in the U.S. in 2012, it is yet to gain approval in the EU, We note that it was denied marketing approval in EU in 2014.

Qsymia sales have been lackluster to date. The uptake has been slow due to high out-of-pocket cost burden for patients owing to lack of reimbursement for the product. Healthcare providers are often hesitant to treat obesity proactively despite the presence of evidence regarding the cardiometabolic benefits of weight loss among overweight and obese individuals.

VIVUS is working on boosting Qsymia sales by expanding reimbursement and promotional initiatives. The company is working on improving patient access while reducing out-of-pocket costs for Qsymia. The company is also pursuing several programs to increase the utilization of Qsymia for the most appropriate patient types. VIVUS has also invested in a digital campaign to expand its reach to information-seeking consumers. Moreover, the company is targeting patients who have failed other therapies and are yet to try pharmacotherapy.

Qsymia is also being developed in mid-stage studies for the treatment of type II diabetes and obstructive sleep apnea.

VIVUS carries a Zacks Rank #3 (Hold). A better-ranked stock in the sector is Agenus Inc. (AGEN - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agenus delivered a trailing four-quarter average positive earnings surprise of 8.8%. Shares of Agenus have risen18.3% in the past three months.

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