It has been a rough and eventful year for weight loss treatment makers. Shares of the two main companies, VIVUS (NASDAQ: VVUS) and Arena Pharmaceuticals (NASDAQ: ARNA), plunged on doubts regarding the demand for their respective obesity drugs, Qsymia and Belviq. Meanwhile, a smaller competitor, Orexigen Therapeutics (NASDAQ: OREX), has slightly risen, although it doesn't have an approved product yet.

VVUS Chart

Source: YCharts.

Let's analyze these three companies to see if investors should continue having faith in their weight loss treatments, or to avoid them at all costs.

Is there any hope left for Vivus?
VIVUS currently has two approved drugs -- weight-loss drug Qsymia, which launched in the U.S. last September, and erectile dysfunction drug Stendra, which the company still hasn't launched despite being approved in the U.S. and the EU.

Therefore, VIVUS is completely dependent on sales of Qsymia, which generated revenue of $5.5 million last quarter -- an underwhelming 34% increase from the $4.1 million in sales it reported in the previous quarter. Jefferies & Co. analyst Thomas Wei had expected Qsymia to hit peak sales of $3.6 billion by 2019, while other analysts expected sales of $1.2 billion by 2017 -- numbers that look increasingly unlikely considering its sluggish start.

The latest data from IMS shows that prescriptions for Qsymia came in at 10,819 for the week ending Sept. 20 -- a 6% week-over-week gain far lower than the double-digit gains investors had hoped for.

VIVUS is looking toward Europe to boost its revenue, but Qsymia has already been rejected twice by the European Medicines Agency's Committee for Medicinal Products for Human Use or CHMP, due to safety concerns.

Meanwhile, VIVUS' actions at the top don't inspire much confidence in the company. Current CEO Seth Fischer is the company's third CEO in two months. Company President Peter Tam, who had been with the company for 20 years and served as president since 2009, announced his upcoming resignation in October.

Is Arena headed down the same road as VIVUS?
Arena, on the other hand, got off to a decent start last quarter. Its newly launched obesity drug, Belviq, posted sales of $1.3 million in the three post-launch weeks included in the quarter. Yet just like Qsymia, peak sales for Belviq are lofty -- with analysts projecting eventual annual sales between $1 billion to $3 billion.

The majority of Arena's $68.9 million in second-quarter revenue came from a $65 million milestone payment from its partner Eisai (NASDAQOTH: ESALY) for Belviq's successful launch. Eisai currently holds the marketing rights to Belviq in North and South America, and Arena earns a royalty of 31.5% on net sales.

Belviq is currently only approved in the United States. Arena withdrew its European drug application for Belviq in May after running into similar problems as VIVUS. However, Arena expanded into Asia with two partnerships -- one with South Korean pharmaceutical company Ildong Pharmaceutical and another with Taiwanese company CY Biotech. It is also pursuing a market approval in Canada.

A harsh downgrade spooks investors
Although it may be premature to pass judgement on Arena before its third-quarter earnings, Credit Suisse analyst Lee Kalowski dramatically reduced his estimates for the stock after a meeting with the company's management on Monday. The stock plunged 9% as a result.

Kalowski estimated that sales of Belviq would only come in at $3.5 million for the current quarter, down from a prior estimate of $19 million. Kalowski reduced his fourth-quarter sales estimate for the drug from $36 million to $12 million, and also decreased his full-year and multi-year sales projections. He noted that Eisai would have to significantly increase its global marketing initiatives if it had any hope of boosting Belviq sales.

Recent numbers from IMS confirm Kalowski's bearish view -- prescriptions of Belviq only rose 4% week-over-week to 3,984 for the week ending on Sept. 20. By comparison, Arena reported 12,500 prescriptions during its first three weeks after launch.

Why is Orexigen trying to break into this ailing market?
Considering the problems that VIVUS and Arena are facing, it is odd that a smaller company, Orexigen Therapeutics, is vying to compete for a piece of this shrinking market. Orexigen doesn't have an approved product on the market, but it has two obesity treatments in its pipeline -- Contrave and Empatic.

Both products attempt to regulate dopamine activity to suppress the appetite. By comparison, Belviq boosts serotonin levels in the brain while Qsymia triggers the release of norepinephrine with the same intent.

Contrave has completed phase 3 trials, and an NDA has already been submitted to the FDA for a possible approval by the fall of 2014. This is Contrave's second attempt at a market approval -- the drug initially failed FDA approval in 2011 due to heart safety concerns. Empatic finished phase 2 trials in January.

Although Orexigen's drugs are arriving very late to the game, the company's major backer, Takeda Pharmaceutical (NASDAQOTH: TKPYY), has agreed to develop and commercialize the drug in North America. Back in 2010, analysts claimed that Contrave would hit peak sales of $1 billion, but it is currently unknown how it will fare if released in the current market against Qsymia and Belviq.

The Foolish takeaway
Honestly, it's tough to find a single reason to recommend VIVUS, Arena, or Orexigen.

It is painfully clear that sales estimates from analysts for these drugs could be too high, erroneously based on the belief that a lack of approved obesity treatments and rising obesity levels worldwide could instantly produce top line growth.

Credit Suisse's downgrade could be the first of many more "corrections" to come, as analysts rush to revise their expectations for these obesity treatments. Investors should steer clear from these stocks until further quarterly sales data and more realistic estimates become available.

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Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.