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business newsDiet Pill Makers Vivus, Orexigen Jump On Study Results
By
Brett Chase
Apr 04, 2011 12:30 pm
A study showing Vivus' Qnexa lowers cholesterol and blood pressure boosted the stock. But safey concerns remain for obesity drugs.
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Vivus (VVUS), the maker of the experimental drug Qnexa, announced the benefits of its diet pill after scientific data was presented by company-sponsored researchers yesterday. Vivus applied for approval of Qnexa last year, appealing to the Food and Drug Administration that obesity is an epidemic in the US and must be treated. The FDA rejected Qnexa on safety concerns over the drug.
Vivus rose 8% to $6.84 in late-morning trading after earlier spiking 15%. Rival Orexigen Therapeutics (OREX) rose even more, climbing 17% to $3.34. Shares of Arena Pharmaceuticals (ARNA), another diet-pill developer, were little changed at $1.38.
Orexigen also applied for FDA approval last year and -- for a time, appeared to be the only company among three that would be cleared to sell a new diet drug. (Arena tried to get its drug, lorcaserin, approved but also was rejected.) Orexigen was able to win a recommendation from a panel of FDA expert advisers -- something that neither Vivus or Arena could accomplish. Vivus hopes to reapply for approval by the end of this year.
US regulators have a couple of major concerns about Vivus’ product: Heart risk and birth defects. The second concern is a relatively new safety issue for the FDA. Vivus said in January that the FDA wanted it to gather data on the occurrence of cleft lip in children of women treated with the drug topiramate for migraines. (Topiramate is one of two active ingredients in Qnexa.) Early last month, the FDA announced a label change for the already-approved drug topiramate that includes warnings about cleft lip and cleft palate in newborns of women taking the drug during pregnancy.
Topiramate (sold under the brand name Topamax by Johnson & Johnson) is approved in the US for migraine headaches and epileptic seizures. The drug is one of two older medicines combined to create Qnexa. The other drug is phentermine, also known as the phen in the fen phen diet pill combination pulled from the market in 1990s.
The three diet drug makers’ stocks bounced up and down together over the past year on various news events. It’s understandable that Orexigen is gaining even more than Vivus today. It was the last to be rejected by the FDA and is still recovering from a 70% plunge in share price in February. Still, Orexigen is faced with conducting another heart safety study, which will delay a resubmission of its FDA application.
Arena faces a much more uncertain future as the FDA noted concerns about pre-clinical studies in which rats given lorcaserin developed cancer.
But with all three companies, there’s a great deal of risk and uncertainty. None of the stocks trade near their highs last year and the FDA has yet to show a change of direction on diet drugs.
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