ADKN, Co. Consulting Team Qsymia Strategic Marketing Plan

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Qsymia® Strategic Marketing Plan “Weighing in on Healthy Weight Management”

Pharmaceutical & Healthcare Marketing Strategy and Planning I

Professor JambulingamDecember 11th, 2012

11:00AM

Presented by ADKN, CO. ConsultingAlexa Disco

Ken NorcrossChristian O’Brien

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Value Proposition

For cardiometabolic patients seeking to own their healthy weight management while achieving wellness

goals, Qsymia® is the only once daily pharmacotherapy that offers weight loss of 10% or greater, providing clinically meaningful results in

cardiovascular and metabolic risk factors.Adapted from: VIVUS Q3 Conference Call, Seeking Alpha

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Agenda

Product Analysis

Internal Analysis: Product and Company

External Analysis: Market, Customer, Competitor

SWOT Analysis, Objectives, Critical Success Factors

Strategies, Tactics and Budget Proposition

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• First once-daily pharmacotherapy with the proven potential of allowing patients to achieve and maintain ≥ 10% weight loss• Indicated for:• use as an adjunct to reduce

calorie diet and exercise• patients who are overweight

(BMI >27 kg/m²) or obese (BMI>30 kg/m²)

• with one or more weight related co-morbidity(ies)• Common Side Effects

include:• Dizziness, insomnia,

constipation and dry mouth

Multiple strengths with simple once-daily dosing

• Active ingredients include: phentermine & topiramate (fixed dose)• CNS Stimulant/Anorexiant

Product Profile

Source: Qsymia Website, Package Insert

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• Inform prescribers and female patients who are pregnant or may become pregnant of the potential risk to the unborn fetus• Ensures that HCPs are offered training on Qsymia® • VIVUS will have access to a physician database that will show prescription volume based on prescriber• Mail order prescriptions only• Requires additional training of pharmacy staff on REMS

procedures

REMS Program

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Total Size of Market:• 78 million people (one-

third U.S. population)• Obesity is directly

related to socio-economic status; slightly higher incidence in women (40.6 million) than men (37.5 million)

Obesity Market Analysis

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Methods of Treatment:• Diet (Weight Loss Market)• Exercise (Weight Loss Market)• Surgical Intervention (Weight Loss Market)• OTC Pills (Weight Loss/Anti-Obesity Market)• Prescription Medication (Anti-Obesity Market)• Holistic Remedies (Weight Loss/Anti-Obesity Market)

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Anti-Obesity Market

Dietary Supplement

s

OTC

Generic Short Term

DrugsBranded Short-term Drugs

Branded Long Term Anti-

Obesity Drugs

• Branded Long Term Anti-Obesity Drugs included products belonged to three categories:

1. Appetite Suppressants2. Metabolism Accelerators3. Nutrient Blockers

(Malabsorption)

• Focus: Delivering value through cosmetic (short-term) change• Limited Efficacy• Undesirable side effect profile (i.e.: GI issues)• Cardiovascular and pulmonary safety issues

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Healthy Weight Management Market

• Two new weight management drugs approved during summer 2012: Belviq (ARENA) & Qsymia (VIVUS)• Focus: Delivering value by improving weight-related co-morbidities; chronic disease management • Improved Efficacy (weight loss >5%)• Improved Side Effect Profile• Improvement in concomitant weight related diseases

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Product Performance Analysis

Sep-12 Oct-120

5000

10000

Qsymia Rx Sales Volume Q3 2012

Rx S...

• Less than 5,000 patients prescribed Qsymia since launch• Generates lots of interest among prescribers• Sales force effective (25,000 targeted) MDs 28,000 details (1-2 details per MD since launch)• 30% drop off rate in filling prescriptions 1,000 patients • Formulary status achieved in November 2012 (Aetna)• Price for 1 30-day supply is $160, avg. co-pay is $62• Strong PBM partnerships through REMS program• Currently in the trial phase as VIVUS has achieved awareness goals through PR an detailing (A-T-U)Source: VIVUS Q3 Conference Call, Seeking Alpha

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Company Analysis

• Qsymia only drug in disease category• Qsymia is currently in clinical trials to address sleep apnea and Diabetes• VIVUS lacks diverse product offerings (only 2 products)• Contract sales force for Qsymia• Clear messaging of Qsymia to physicians• Positive relationships with physicians in disease state• Operating at a loss due to Qsymia commercialization expenses• Strategic partnerships with contract suppliers to encourage steady product of API• Lacking comprehensive complementary service for Qsymia• Weak company recognition/reputation

Source: VIVUS Website

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Overall Internal Analysis

Strengths• REMS program• AETNA formulary coverage achieved• Already in trial phase since launching in September 2012• Strategic partnerships with suppliers• Clear messaging with Qsymia• Strong operations and infrastructure

Weaknesses• 30% Patient Drop off rate due to price • Less than 5,000 patients prescribed Qsymia since launch• Operating at a loss due to commercialization• Qsymia is only drug in disease state• Lacking diverse product portfolio

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Payer- Outcomes oriented, rewards efficacy- Progressive and seeks innovation- Likely to provide formulary coverage based due to trend in weight management

Patient- Cardiometabolic patients seeking healthy weight management- Chronic weight issues- Non-cosmetic orientated- Need resources, support and lifestyle modification in order to be successful

Prescriber- Outcomes oriented physicians with high influencing potential- Treat weight related cardiovascular and metabolic co-morbidities- High anti obesity prescribers and high co- morbid prescribers (hypertension, high cholesterol and diabetes) -Early adopters of innovative products

Customer Analysis

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Market Share as of 9/2012

AlliXenicalAdipexPhentermine compoundsDiethylpropion

Competitor Analysis Anti-Obesity Risk/Benefit Comparison Profile

Direct Competitor: Brand Name

Alli Xenical Belviq

Indication Obesity Management

Obesity Management

Healthy Weight

Management

Safety Profile Good Good Good

Efficacy Profile

High High Low

Dosing 60mg 120mg 10mg

Competitor Analysis

• Major Threats include:• Generic Competiton• Overall sales in category declining• OTC indirect competitors erode

sales

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Threat of New Product Entry- Strong anti-obesity pipelines in pharmaceutical companies- More dual combination therapies

RATING: MEDIUM

Degree of Competitive Rivalry- Competes directly with newly approved Belviq- Competes directly against Alli (largest market share)

RATING: LOW

Buyer Power- Mail-order pharmacies allow consumers to choose to fill the script- Price is fixed at $160 for 30-day supply-Cannot bargain low cost until formulary coverage is gained

RATING: LOW

Supplier Power- Few suppliers of API

RATING: HIGH

Threat of Substitution- No substitute product in weight management category

RATING: LOW

Environmental Analysis

Overall industry rating:LOW

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Category Trend

Customer • Wellness oriented

Economic • Rising medical costs associated with obesity

Government • Providing grants to support prevention

Political • Changing subsidized meals for obese children

Regulatory • US and EU taking anti-obesity drugs off market for safety reason

Technological • Increase in technology leads to increasing sedentary lifestyle

Environmental Analysis

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Overall External Analysis

Key Opportunities• Emphasis on outcomes• Weight management, not cosmetic• Emphasis on addressing co-morbidities• Overall message: wellness• Prevention is rewarded• Healthcare Reform encourages pharmaceutical intervention in guidelines

Key Threats• Increasing innovation leads to obsolescence• Competing messages • Strong pipelines for anti-obesity medications• Economies of Scale • Rising costs of healthcare• EU and US heavily scrutinizing anti-obesity products and with drawing some from market

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SWOT Analysis

Strengths• Clear messaging of Qsymia to physicians• REMS program• Already in trial phase

Weaknesses• Lacking diverse brand portfolio (high risk)• 30% drop off rate in patients filling Rx• Qsymia is only drug in disease state

Opportunities• Emphasis on addressing co-morbidities• Wellness orientation• Encouragement of pharmaceutical intervention in guidelines for treatment

Threats• Generic competition and declining sales growth in anti obesity market• Antiquated perception (“cosmetic”)• Economies of Scale

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1. Improving Payer (Formulary) Coverage2. Improving drop-off rate3.Shift perception of anti-obesity drugs4.Efficacy Profile5.Support Programs

Critical Success Factors

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Strategic Objectives

Improving drop-off rate from patients not filling

their prescription for Qsymia

Expanding Trial so that it will become usage

New 30 day trial pack of Qsymia and Rewards

Program

Creating comprehensive support program that

encourages compliance and patient success

Patients need support in order to reach weight loss goals

“Qsymia Full Circle”

Shift perception of Anti-obesity drugs

Qsymia is an adjunct to diet and exercise and for

maintaining a healthy weight

“Be Well” Public Service Campaign

Market Customer Environment

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Strategic Initiative 1“Be Well” Public Service Campaign

• Overwhelming perception that pharmaceutical drugs in this disease are “quick-fixes”, “miracle workers”, and for cosmetic purposes only• Trend is that consumers are becoming more health conscious and wellness concerned• This will result in patients utilizing pharmacotherapy as an adjunct to maintaining healthy weight

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Strategic Initiative 1 “Be Well” Objective

Increase awareness by 15% to those who would be willing to try a weight loss pill by 2016.

Those who want to use a pill: 15% of total obesity population (4,105,500 people)

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Strategic Initiative 1“Be Well” Public Service Campaign

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Strategic Initiative 1 Additional Tactics to Leverage Healthy Weight Management Market

definition

Digital Marketing• Unbranded website roll-out• Unbranded banner advertising• Unbranded online video advertising• Health site (WebMd) partnerships

Public Relations• Publishing behavioral studies/market

research attitudes surveys of patients taking Qsymia for healthy weight management

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Strategic Initiative 2 “Qsymia Full Circle”

• The Q&Me® Program already offered by Qsymia lacks some important features including: • access on smart phones• entertainment, interaction• monitoring metrics and rewards• social networking• food recommendations

• Deploy a mobile application “Qsymia Full Circle” at point of prescription being written using ScanCode Technology located on patient brochures

Q…Full CircleiPhone app

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Strategic Initiative 2 “Qsymia Full Circle”

1. Scan Barcode on back of patient

literature

Qsymia Full Circle

Q-nnect with your Q-mmunity™

Hey gang! I’m food shopping right

now. Any suggestions on

which convenience meals I should get?

Check the Lean Cuisines that are “Q-Sine” labeled! I like the chicken

fettuccine!

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Strategic Initiative 2 “Qsymia Full Circle”

Q-Sine

Approved

Terrific! Looks delicious! Thanks

again for your help!

No prob! Enjoy !

Alliance with Nestle’s Lean Cuisine Product Line

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Strategic Initiative 3New Qsymia Trial Pack and Rewards

Program

• Drop off rate when filling prescriptions for Qsymia is 30%

• Price is too high for some patients • Lack of formulary coverage does not

enhance the desirability of our pricing strategy

• Leveraging existing trial use encouraging switch to usage

• Entice patients with chronic weight issues with co-morbidities present

• Goal: Decrease drop-off rate by 5% between patients getting script and not filling it, by end of year 1

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Strategic Initiative 3New Qsymia Trial Pack and Rewards

Program

• Existing 14-day trial program from Qsymia’s website

• New 30 day trial back will demonstrate greater efficacy

• Patients will be encouraged to continue to stay on Qsymia after the 30 days to continue seeing positive results

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Strategic Initiative 3 Additional Tactics for Improving

Compliance

• Qsymia Qoins® reward positive behavior when patients are logged into their Full Circle mobile application or desktop online username• Frequency of updating physical activity log• Posting/sharing healthy recipes• Adhering to weight loss goals by completing

biometric screenings

• Rewards can add up within a range and redeemed for these following prizes:

Qsymia Coupon Discounted Gym Memberships

Coupons at Wegman’s

Supermarkets

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Strategy #1: • Converting users from cosmetic OTC diet pill use to

healthy weight management Qsymia use• Track Amount of Traffic to unbranded websites and

how many people registered to receive information about Qsymia

• Track impressions on unbranded advertisements for the “Be Well” and healthy weight management campaigns

Metrics

Strategy #2:• Track number of downloads of Full Circle

application from App Store and Google Play• Track frequency of users using application• Track effectiveness of POS barcode scanning

Strategy #3:• Track number of prescriptions through PBMs and

REMS program

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Budget

Ongoing Marketing cost estimates Year 1 Ongoing

Assumptions ongoing as % of

year 1       Advertising      Push $1,000,000 $1,000,000 100Pull $12,000,000 $6,000,000 50Total advertising $13,000,000 $7,000,000        Promotion      Developmental support program $200,000 $0 0L&L $600,000 $300,000 50Production support $2,000,000 $2,000,000 100Training and promo $500,000 $500,000 100Direct mail $200,000 $200,000 100Total Promotions $3,500,000 $3,000,000        PR      Medical education $3,500,000 $1,750,000 50Press release $800,000 $800,000 100Total PR $4,300,000 $2,550,000        Market Research $600,000 $600,000 100SF allocation $1,491,000 $1,491,000 100Product management $255,000 $255,000 100       Total Budget $23,146,000 $14,896,000 

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Forecasting

  Year 1 Year 2 Year 3 Year 4 Year 5

Method 1          

Number of Americans with BMI between 25 and 30

78,200,000

78,200,000

78,200,000

78,200,000

78,200,000

x 35% actively trying to lose weight

27,370,000

27,370,000

27,370,000

27,370,000

27,370,000

x 15% who are comfortable using diet pill

4,105,500

4,105,500

4,105,500

4,105,500

4,105,500

10% who might purchase Metabical in Year 1          

adding 5% each subsequent year 410,550

615,825

821,100

1,026,375

1,231,650

plus 60% buy a second package 246,330

369,495

492,660

615,825

738,990

plus 20% of these buy a third package

49,266

73,899

98,532

123,165

147,798

Sales 706,146 1,059,219 1,412,292 1,765,365 2,118,438

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