The Weight Loss Drug Company Investors Need to Watch Out For

The weight loss drug market has seen a flurry of activity in recent years as a growing number of companies vie to capture market share with their own potential billion dollar solutions of a rapidly growing global health concern.

As new products roll into a market that has lacked real results from existing solutions, a tremendous amount of discussion has been kicked up over the pros and cons of treatment approaches among a wide array of different drug products.

Recent introductions to the obesity market include Belviq, currently marketed by Arena Pharmaceuticals (NASDAQ: ARNA  ) , and Qsymia, currently marketed by VIVUS (NASDAQ: VVUS  ) , both of which joined a market with a limited decent number of options.

Prior to their introduction, GlaxoSmithKline's (NYSE: GSK  ) Alli and a host of generic forms of drug workhorse phentermine were among the few viable options for patients for whom lifestyle changes and dieting were not producing healthier living and weight loss. Additionally, steadily progressing along the approval track is Orexigen Therapeutics' (NASDAQ: OREX  ) , which recently released promising clinical trial data concerning the safety of its drug Contrave.

This cast of companies and their respective products is nothing new to most obesity market watchers. However, investors should probably add one additional company that will likely affect the competitive landscape for some of the better known players.A company with recent positive Phase II results as well as plenty of cash to boot– namely, Massachusetts-based Zafgen and its targeted weight loss product beloranib.

Success under the radar
Unlike Arena Pharmaceuticals and VIVUS, the progress being made Zafgen has received considerably less publicity. The private company based out of Cambridge has undergone several rounds of funding, most recently completing a Series E round that net it more than $45 million in cash to keep its operations going.

Unlike most currently marketed weight loss drugs that work by changing brain chemistry to decrease food cravings or curb the satisfaction of eating, beloranib targets a specific protein that is involved in the body's natural ability to package and use fat. This difference in approach could potentially give beloranib an advantage over competitors.

Most importantly, Zafgen's phase 2 clinical trial results for beloranib showed promising potential for the little-known drug that takes after technology more commonly seen for treating targeted cancers.

Patients taking beloranib lost as much as an average of 10kg during the 12-week trial and, more interestingly, showed improvements in their cholesterol and reduction of food cravings after completing their course. Even more promising, none of the patients experienced any serious or dangerous side effects, with a limited portion suffering only mild nausea/vomiting and sleep disturbances.

Additionally, beloranib may be able to avoid scheduling as a controlled substance by the Drug Enforcement Agency. Big-name products like Qsymia, Belviq, and phentermine are all categorized as Schedule IV medications because of their effects on brain function. While Schedule IV drugs are generally recognized as having only low or limited abuse potential, the label still carries all sorts of regulatory strings that create hasslesome requirements in prescribing, storing, and monitoring the drugs.

A real contender in the wings
Despite a great deal of promising early data, it may be too soon to say whether Zafgen could displace some of its competitors that are a few years ahead in development and marketing. With its recent phase 2 trial results becoming public, the company likely has a few more years to go before it can achieve approval and begin marketing.

Weight loss results from its recent trial puts beloranib comfortably among its competitors Arena and VIVUS, but beloranib is currently administered as an injection not unlike insulin, and this may prove to be barrier later for its success.

However, against the highly competitive backdrop of the obesity market, Zafgen and beloranib could certainly make a splash and is worth a second look by any investors following the continuing weight loss battles.

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Read/Post Comments (10) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 13, 2013, at 2:11 AM, marp11 wrote:

    get back to us in a FEW MORE YEARS??

    bwahhhh

    \

    BELVIQ WILL BE DOING 200K A WEEK WORLDWIDE AT THE LEAST

  • Report this Comment On December 13, 2013, at 2:11 AM, marp11 wrote:

    AN INJECTION???

    OK SEE YA SOON

  • Report this Comment On December 13, 2013, at 7:11 AM, mikezzz111 wrote:

    Only one small note about Zafgen being an injection. People will not inject a weight loss drug. Belviq - Safe and effective weight loss with HbA1c reduction is best choice.

  • Report this Comment On December 13, 2013, at 7:55 AM, Anfiska wrote:

    I think that we need to be very careful with weight loss drugs. On the one side they may help you to lose your weight and on the other side they can run many other chemical reactions with unknown outcome. Besides, some preparations may influence on proteins production by the body and this as you know is going to cause adaptation. http://fatlossfactorsreviews.com/ What others think about it?

  • Report this Comment On December 13, 2013, at 12:55 PM, feelinIrie wrote:

    Eric, try and have a little dignitiy and stop selling yourself for these useless articles on useless drugs.

    You do realize no one will use an injection for weiht loss.

  • Report this Comment On December 13, 2013, at 6:28 PM, bamobrien wrote:

    I think we're seeing a trend in healthcare that is really highlighting obesity and obesity care as a priority.

    I don't think its unfair to think that a weight loss medication, subcutaneous or not, might not have an audience especially when its non-CNS affecting.

    The bigger picture here is that we're seeing a medication with a *very* novel mechanism of action. As much as Belviq is touted as being different from the heard- pharmacologically its repackaged fenfluramine.

    Maybe it won't be beloranib, but rather a cousin (preferably one with an oral formulation) that will eventually upset the weight loss market equilibrium.

  • Report this Comment On December 16, 2013, at 3:50 PM, AreaRich wrote:

    Porn stars are never allowed to work in legitimate film industry. Don't be a tool, it will have a lasting effect on your ability to find legitimate work in the future.

  • Report this Comment On December 16, 2013, at 9:36 PM, bamobrien wrote:

    Don't get too fixated on one product, Belviq or otherwise, it may have a lasting effect on your investments.

  • Report this Comment On December 17, 2013, at 11:27 PM, Foreeverlong wrote:

    Oh, yes! I like injectable drugs! Doesn't everyone?

  • Report this Comment On December 26, 2013, at 4:23 PM, HealnCure wrote:

    At Heal n Cure, a weight loss and wellness clinic, we combine nutrition, exercise, supplementation, and weight loss medications to deliver weight loss results quickly while under the supervision of a board certified bariatric physician. Before any weight loss medication is prescribed the patient undergoes all necessary testing to guarantee it is safe for them to take such a medication. We believe that weight loss medications are most effective when the patient has also adopted a healthy diet and exercise program.

    To learn more about Heal n Cure's personalized weight loss program please visit our website at http://www.healncure.com/

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