Vivus Shot Down By Panel, Arena and Orexigen Hold Promise

One of the new contenders in the weight loss race that I have never recommended is Mountain View, CA-based Vivus (Nasdaq: VVUS). Vivus suffered a major setback at an important meeting with a panel of experts, set up by the FDA. The panel essentially said that the negative effects outweigh the weight loss benefit offered by the Vivus drug. The panel of experts reported in a 9-7 vote that Vivus' experimental weight loss drug should not be cleared for sale in the U.S.


The expert panel refused to recommend that the FDA approve the Vivus’ experimental diet drug Qnexa due to certain safety concerns. One of the main problems panelists saw with the treatment was that that there just isn’t enough information. The resounding sentiment was that more studies and research needed to be done, the longest studies conducted lasted only one year. Vivus shares dove almost 60% to $5.16. Furthermore, the NYSE Arca Shares tanked early this morning, after yesterdays meeting of the FDA advisory panel. The pharmaceutical Index (DRG) dropped 0.3% to 288.95 and the NYSE Arca Biotechnology Index (BTK) dropped 0.4% to 1044.18.

It is up to the FDA to approve or disapprove Vivus' combination treatment of phentermine and topiramate (Qnexa) for sale in the US, although the agency usually follows the advice of its expert panels. The FDA has set Oct 28, 2010 as the date to make that decision

What does this development mean the competition. Before the panel shot it down, many believed that Qnexa was the most effective of the three obesity drugs currently awaiting an approval decision by the FDA. (Except me, I never liked the idea of using topiramate). My reasons against this combination are as follows:

Topiramate is an anticonvulsant drug primarily used to treat epilepsy. On May 21, 2010, Ortho-McNeil plead guilty and was fined $6.14 million by the FDA for promoting Topamax (topiramate) to treat psychiatric disorders, without applying for approval and no data from a well-controlled clinical trial to demonstrate that Topamax was safe and effective to treat any psychiatric conditions. Also, preliminary data suggests that, as with several other anti-epileptic drugs, topiramate carries an increased risk of congenital malformations. This might be particularly important for women who take topiramate to prevent migraine attacks. Finally, most anti-epileptic drugs, including topiramate, have been associated with a statistically significant increase in suicidality.

I have recommended both Arena Pharmaceuticals (Nasdaq: ARNA) and Orexigen Therapeutics (Nasdaq: OREX) in past newsletters (The Small-Cap Biotechnology Feedbag). The obesity market will be worth at least $3 billion, if not much more, and the stakes are huge for obesity drug development, as an estimated two-thirds of Americans are considered overweight or obese with little in the way of pharmaceutical alternatives to diet and exercise. The Arena advisory panel will meet on September 16, 2010. It is possible that this could be smooth sailing for the drug. It’s been widely noted that Arena’s lorcaserin has the best safety profile, longest study, and Arena is the only one of these companies to have found a marketing partner.

Orexigen Therapeutics' diet drug Contrave is also up for approval.  Many industry experts believe that while Contrave is safer than Qnexa, its safety profile may not be as strong as that of lorcaserin. However, in June, Orexigen presented positive data that its obesity treatment Contrave lessened symptoms of depression and improved eating control in obese patients who suffered from major depression. Furthermore, Orexigen put forward strong evidence that Contrave would have a secondary role in controlling diabetes at the annual meeting of the American Diabetes Association in Orlando, FL. An advisory panel of the U.S. Food and Drug Administration is expected to review Contrave's application on Dec. 7. 2010, which gives Orexigen even longer to address any of the problematic issues that Vivus’ panel came up with. The FDA is scheduled to make a decision on whether to approve the product by Jan. 31, 2011.