Vivus Inc. shared details of its launch plans and risk evaluation and management strategy (REMS) for newly approved weight loss drug Qsymia (phentermine/topiramate) on an investor call Wednesday morning. Vivus is aiming for a fourth-quarter launch with a REMS that includes a medication guide delivered with each prescription, a health provider training program and distribution of the drug through certified pharmacies only.

The Mountain View, Calif.-based company also will strongly recommend monthly pregnancy testing for female patients, but neither the pregnancy testing nor the physician training is mandatory. The drug is assigned pregnancy category X, meaning that the risks outweigh the possible benefits for pregnant women and their babies.

"This is not a patient registry or a pregnancy registry, and it is not restricted prescribing. We are training health care providers, but it is not a mandatory enrollment," said Barbara Troupin, vice president of scientific communications for Vivus.

In addition, as is typical with a REMS, Vivus will provide the FDA with periodic assessments of its progress and results.

Qsymia is approved for obese patients with a body mass index (BMI) of 30 or more, or those with a BMI of 27 or more plus one or more obesity-related comorbidities.

The REMS has met with approval from analysts, who consider it reasonable and not overly difficult.

"In our view, the REMS is not at all burdensome to starting therapy," wrote Brean Murray Carret and Co. analyst Jonathan Aschoff.

Shares of Vivus (NASDAQ:VVUS) gained $2.54, or 9.6 percent, to close Wednesday at $29.

Vivus is in the process of hiring a sales force for Qsymia, completing manufacture of launch quantities of the drug and preparing packaging.

Qsymia will be available only through mail-order pharmacies to begin with, and that availability may be expanded to retail pharmacies eventually.

One challenge that Qsymia faces is that it initially will only be available for cash pay, and reimbursement approval for payers could take a year or more. Even after that process is complete, Vivus expects that reimbursement for Qsymia will reflect rates of reimbursement for medical obesity treatments in general, which runs about 30 percent.

"Our efficacy is appreciated by payers," said Peter Y. Tam, Vivus' vice president.

Reimbursement is projected at about 30 percent of payers one year from launch.

"We expect that number to increase," Tam said, pointing out that employers are likely to be interested in reducing workplace absenteeism and higher medical costs associated with obesity. Those employers also would have the option of purchasing obesity riders, even when the contracted insurer typically does not cover obesity treatments.

Vivus did not disclose its pricing plans, but noted that patients paying cash for Qsymia would be very sensitive to price, and that its price would be "competitive."

The company provided details regarding drug titration for new patients. Patients initiating therapy for the first time would start on the lowest dose for the first two weeks. At that point, the patient is evaluated for response, and, if necessary, is boosted to the midrange dose.

After 12 weeks on the drug, if the patient has not lost 3 percent of body weight, that person gets one more 12-week trial at the highest dose, after which the test for continuation is 5 percent loss of body weight. The total trial period is up to 28 weeks.

Vivus' clinical trials showed that patients who did not meet those benchmarks were unlikely to benefit from the drug.

The FDA asked Vivus to carry out 10 postmarket studies. In addition to a cardiovascular outcomes trial, Vivus will conduct safety and efficacy studies in pediatric and adolescent patients. Studies of drug utilization, pregnancy exposure and renal function are also on that list.

"We'll be working with the FDA to finalize design of these studies," Tam said.

Whose Regime Will Reign Supreme?

Qsymia's approval puts it in hot competition with Arena Pharmaceuticals Inc.'s Belviq (lorcarserin), approved June 27. Arena was asked to carry out six post-approval trials, including a long-term cardiovascular outcomes study for risk of heart attack and stroke, plus it is likely to undergo Drug Enforcement Agency (DEA) scheduling.

Qsymia, on the other hand, has a whopping 10 post-market studies to run, but it is classified as a DEA Schedule IV non-narcotic drug, and does not need to go through the DEA scheduling process.

That means "barring a longer-than-expected time to launch, [Qsymia] would be the first one to get to the U.S. market," noted Cowen and Co. analyst Simos Simeonidas, adding that Belviq's DEA scheduling could take four months to six months.

Qsymia's approval dented shares of San Diego-based Arena (NASDAQ:ARNA), which dropped $1.07, or 9.7 percent, to close Wednesday at $9.98.

Arena does not carry the viscerally frightening risk of birth defect, but Qsymia boasts the greater weight loss benefit – about 10 percent of body weight, compared to Belviq's typical result of 5 percent.

Although there is arguably plenty of room on the market for the two obesity drugs, the drug launches will be a horse race. Piper Jaffray analyst Edward Tenthoff predicted U.S. Belviq sales of $240 million in 2013, $497 million in 2014 and $1 billion in 2016.

Thomas Wei, of Jefferies and Co., estimated peak sales of Qsymia of $3.6 billion by 2019.

And other products are on the way, starting with Orexigen Therapeutics Inc.'s Contrave (naltrexone/bupropion), which is expected to enter the market around 2015, after completing an FDA-mandated cardiovascular outcome study. Although entering late, it could catch up while Vivus and Arena are finishing their homework.

"Qsymia's apparent monitoring requirements lessen its lead over Belviq and provide Contrave a potential greater market share opportunity depending on the Light trial outcome and potential label," wrote Marko Kozul, an analyst with Leerink Swann.

Orexigen's stock (NASDAQ:OREX) closed Wednesday at $6.92, down 22 cents.