Thinning Out the Pipeline

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Obesity ... the final frontier. These are the voyages of the drug companies. Their mission: to help patients shed the pounds, to boldly go where no company has successfully gone before.

Unfortunately, two more drugs got assimilated by the Borg on Wednesday.

Sanofi-Aventis (NYSE: SNY  ) is stopping research on Acomplia, its diet drug that was sold in Europe until it was pulled from the market two weeks ago as officials became increasingly worried about side effects -- depression, anxiety, and stress disorders. The drug never made it past the Food and Drug Administration for the same reasons.

Farther back in the drug development process, Pfizer (NYSE: PFE  ) could see the writing on the walls of the FDA and scrapped its CP-945,598, which was designed to target the same cannabinoid receptors in the brain -- the ones that give the "munchies" to smokers of marijuana.

The two companies join Merck (NYSE: MRK  ) , which ended development of its cannabinoid receptor inhibitor, taranabant, after a lackluster phase 3 trial earlier this month. The drug didn't work too well at the low dose, and the high dose caused the same sort of side effects seen in Acomplia.

You'd think the news that three large pharmaceutical companies were abandoning the market would help smaller companies developing anti-obesity drugs like Arena's (Nasdaq: ARNA  ) Lorcaserin and VIVUS' (Nasdaq: VVUS  ) Qnexa that don't have the same mechanism of action, but anti-obesity drugs are the final frontier for a reason. It's a major potential market, but there's also a lot of risk in developing drugs. For whatever reasons, drugs that do make it past the FDA -- like Abbott Laboratories' (NYSE: ABT  ) prescription drug called Meridia or GlaxoSmithKline (NYSE: GSK  ) over-the-counter drug alli -- either don't work all that well or have unpleasant side effects … or sometimes both.

The anti-obesity market may be a potential supernova for a drugmaker's revenue, but for now, it remains a black hole sucking up drugs and making pipelines thinner.

Pfizer and Glaxo are Income Investor recommendations. To see how dividend-paying stocks can offer both secure income and the opportunity for growth, take a free look at this newsletter with a 30-day free trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value selection. The Fool owns shares of Pfizer. The Fool has a disclosure policy.

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  • Report this Comment On November 07, 2008, at 3:28 PM, PhillyDan wrote:

    Speculation on my part, but this could indicate that Sanofi, Pfizer, or Merck could be potential partners with either Arena or Vivus for their anti-obesity drug candidates. We probably will get an answer to my speculation sometime in the first quarter of 2009.

  • Report this Comment On November 07, 2008, at 6:42 PM, TMFBiologyFool wrote:

    The companies might look for new drugs in obesity (Pfizer has said it won't develop any more, but I'm not sure if that would exclude partnering). But it's a really difficult space to guess whether drugs will meet their endpoints (humans are genetically programed to store fat for hard times). Pharma may just wait for phase 3 trials to be completed before jumping in. It'll cost them a lot more, but that's the price of lower risk.

    But you're right, Arena and Vivus will likely partner the drugs and not market them alone.


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