Have Anti-Obesity Drug Prospects Finally Gone Belly-Up?

On paper, it just makes so much sense that physicians and patients would turn to chronic weight control management therapies offered by VIVUS (NASDAQ: VVUS  ) and Arena Pharmaceuticals (NASDAQ: ARNA  ) as in addition to proper diet and exercise to lose weight. But paper is where this fairy tale abruptly ends.

It has been nothing short of a nightmare for both VIVUS' Qsymia and Arena Pharmaceuticals' Belviq since they were brought to market -- each with some similar and unique problems.

VIVUS & Arena's nightmarish year
Qsymia made it to market about a year before Arena's Belviq, but it was slower than molasses in winter out of the starting gate. Part of that can be blamed on the fact that VIVUS has chosen to go it alone without a marketing partner. It does allow VIVUS to reap the rewards of Qsymia's full sales potential, but it also means bearing all of Qsymia's marketing expenses and relying on a less experienced sales staff.

Another problem VIVUS ran into was that insurers were slow to add the fat-fighting drug to their covered medications list. This meant a number of patients were paying for Qsymia out of their own pockets early on, with some choosing to leave their prescriptions sitting on pharmacy shelves rather than pay.

Lastly, Qsymia's less favorable safety profile in relation to Belviq has partially held it back. Based on the phase 3 comparisons, Qsymia delivered more impressive overall weight-loss results, but Belviq had the preferential safety profile that would likely make it the dominant weight control management choice among physicians. To add insult to injury, Qsiva (the brand name for Qsymia in the EU) was turned away in Europe because of long-term safety concerns, which the Committee for Medicinal Products for Human Use, or CHMP, felt VIVUS had not addressed in its studies.

The problem is that if you thought Arena Pharmaceuticals was going to be in much better shape, then you'd have been equally as wrong!

Arena's Belviq was delayed by a year because of scheduling by the Drug Enforcement Agency, and only made it to pharmacy shelves toward the end of Arena's second quarter of fiscal 2013. Belviq has suffered a similar fate to Qsymia in that insurers have been slow to adopt coverage, making it a tough sell to the public. In addition, Belviq pulled its marketing authorization application in Europe long before the European Medicines Agency would have been able to render a decision, as it realized its drug was on a similar path as Qsiva if it pursued a marketing authorization.

Is this as good as it gets?
Within the past week, we've received confirmation of just how poor sales of these two purported blockbusters have been. For the full year, Qsymia sales totaled just $23.7 million for VIVUS while Belviq racked up $16.8 million in global sales through two-and-a-half quarters.


Source: Arena Pharmaceuticals, IMS NPA. 

Keep in mind Belviq's sales are split between marketing partner Eisai (NASDAQOTH: ESALY  )  and Arena, which gets a 31.5% royalty interest on sales of the drug.

Obviously, having a strong marketing partner like Eisai is helping Arena, and the fact that Eisai is doubling its marketing force is only expected to translate into faster sales growth for Belviq; but I have to wonder, is this really as good as it gets?

The way I view it, there are two primary impediments working against both Qsymia and Belviq, beyond just the surface problem that these two therapies need more insurers to jump on the bandwagon.

First, public action on obesity has to change. Currently, more than 35% of all U.S. adults are considered obese (i.e., a body mass index above 30). The American Medication Association even declared obesity to be a disease in 2013. Additionally, respondents to a 2012 poll by the Associated Press (see here) viewed obesity/overweight as the second most serious health problem in the United States. The problem, then, is harnessing that perception and creating better public action.


Source: Centers for Disease Control and Prevention.

You'd think an adjunct therapy that could aid in weight loss and reduce the burden of exercise a bit would be an instant winner, but it simply hasn't, as public action on obesity is still in what I'd consider to be its early stages in the U.S., as evidenced by the tapering, but not lowering, of U.S. obesity rates.

The other factor here is that I believe physicians are extremely leery about prescribing a medication that could be viewed by obese people as a "cure" or "fix-all" for obesity as opposed to proper diet and exercise. To add to that point, I suspect physicians may also be concerned about the long-term side effects of taking these fat-busting drugs, which may be weighing down both drugs' sales potential.

Is there light at the end of the tunnel?
We've certainly been here before, so don't get too excited, but there is an anti-obesity therapy currently under review by the Food and Drug Administration that could walk the line perfectly between weight-loss efficacy and safety, as well as obesity awareness and physician concerns. That therapy is Orexigen Therapeutics' (NASDAQ: OREX  ) Contrave.

Orexigen's claim to fame thus far is its interim analysis of a study of the cardiovascular effects of its anti-obesity drug, Contrave, known as the Light Study. This approximately 8,900-person study demonstrated no increase in adverse events tied to Contrave, essentially clearing it a path for an approval in the U.S., and perhaps paving the way for approval in the EU despite Qsymia and Belviq beating it to market in the U.S.

What's more, Orexigen has a solid partner in Takeda Pharmaceuticals (NASDAQOTH: TKPYY  ) , which it has been partnered with since Sept. 2010. Like Arena, Orexigen won't realize the full sales potential of Contrave, but it'll also have a highly experienced sales staff marketing this potentially revolutionary drug if it's approved.

Has this sector gone belly-up?
It's probably still a bit too early to call the anti-obesity sector a total failure given that Belviq has less than a year's worth of sales under its belt, and Contrave still has its decision day with the FDA yet to come. But, if Belviq can't eclipse $50 million in global sales in fiscal 2014, or if Contrave stumbles out of the gate like its peers, it may be time to consider that this much-hyped sector just may not be able to deliver on previous expectations.

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Editor's Note: A previous version of this article indicated that the LIGHT study included 9,800 people and has been completed. The study actually enrolled 8,900 people and only an interim analysis of the study has been completed. This has been revised and the Fool regrets the error.


Read/Post Comments (12) | Recommend This Article (3)

Comments from our Foolish Readers

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  • Report this Comment On March 04, 2014, at 2:25 PM, sp500chartdotcom wrote:

    Contrave is nothing but Qsymia with a 60% higher side effects dropout rate.

    Two generic drugs that are combined into one pill is a pitiful excuse for therapeutic discovery. There is nothing new here, just like with Qsymia.

    Qsymia's trials saw about a 16-18% dropout rate due to side effects. Contrave trials lost TWENTY-SIX percent of the active arm to side effects dropouts. That's more than one in four saying 'Stop it... I cannot keep taking this'.

    Belviq (Arena) had an 8% dropout rate which was no higher than the placebo.

    Funny how the thing that is 'just around the corner' seems so enticing, yet everything else about Contrave says it will be the worst of the lot.

  • Report this Comment On March 04, 2014, at 2:32 PM, marp11 wrote:

    hahaha the fools

    hahahah

    orex to the rescue.....hahahahhaaha

    eom

  • Report this Comment On March 04, 2014, at 2:34 PM, marp11 wrote:

    solid partner....how much DINERO HAS TAKADA PUMPED INTO OREX SO FAR????

    HUH??? HOW MUCH??? OHHH ZERO???

    NADA???

    EISAI 135 MILLION AND 1.2 BILLION TO GO

    ARNA BELVIQ WINNER

  • Report this Comment On March 04, 2014, at 2:38 PM, biogemfinder wrote:

    As far as orex is concerned, my trading strategy is this:

    I will wait for the pumpers and MMs pump it all the way to 10-20 until FDA approval and the day it is approved by the FDA, there may be another pop. I will buy bucket full of put options. Don;t fight these morons just play the games as they like to play it.

    ARNA's Belviq is the only drug worth owning for the long hall despite all the trashing and bashing! Its the only new and novel entity to treat obesity, with minimal side effects and the potential to have 2x to 3x higher efficacy when combined with phentermine. Yes we will have to be patient but 2014 will be pivotal as the script #s should grow to at least 20K per week.

  • Report this Comment On March 04, 2014, at 4:33 PM, marp11 wrote:

    20k a week by may...tv ads start april

    seans masters are in panic mode

    arna going to explode higher

  • Report this Comment On March 04, 2014, at 6:35 PM, PhillyDan wrote:

    Sean,

    When I read these articles, I gauge how knowledgeable the author is by what research they have done to back up their article.

    The following back to back sentences show why you have flunked my test for a reasonable article.

    "Belviq has suffered a similar fate to Qsymia in that insurers have been slow to adopt coverage, making it a tough sell to the public. In addition, Belviq pulled its marketing authorization application in Europe long before the European Medicines Agency would have been able to render a decision, as it realized its drug was on a similar path as Qsiva if it pursued a marketing authorization."

    Insurance coverage has went from about 30% to close to 55% and projected to go to 75% by the EOY. I would not call a 183% growth in Insurance Coverage slow!

    Now to the second sentence. Arena had completed an OE (oral explanation) with the CHMP. An OE is held very close to the "positive or negative" recommendation by the CHMP. So your comment is wrong. They were very close to hearing that recommendation and if positive, it would only be another 30+ days until EMA approval. Next time you decide to write a "hit" piece, at least get your facts in order.

    In addition, from June 11th when the launch started scripts per week went from the low 100's to now over 8K per week using adjusted numbers. Since IMS is off by a lot and Symphony is closer but still off by about 10-12%. Thus, scripts since the launch have grown by 16X, I know a positive spin but a factual positive spin. The game can be played both ways. Expect to see between 7-15%+ week over week gains in the coming weeks, especially after TV ads start airing in April.

    I'm not hear to bash either Q or Contrave. But Takeda has four different divisions and each division has a slice of the 1800 sales reps in the U.S. If you think 1800 sales reps are going to be out pushing Contrave, think again. Probably about 400. In addition, they like Vivus and Eisai will have to go through the same process. 1. Educate the physicians first. 2. Then after 3-4 months, start print ads. 3. Then after about 7-9 months, TV ads can be run.

    Lastly, you gave no mention of the fact that Belviq can be prescribed with phentemine right now and it is being done with anecdotal evidence of over 15% weight loss. You also forgot to mention the ongoing 12 week clinical safety study designed in conjunction with the FDA that studies Belviq co-administered with phentermine. If the study results are positive both for safety and efficacy, then that is another push for Belviq. Again, you feel to mention that Belviq will be studied for smoking cessation, with those studies starting in April.

    You also forgot to mention that Belviq had the only T2DM phase III study. A study that showed good weight loss for T2DM patients but excellent improvements in HbA1c and FG, some due to weight loss and some due to an independent mechanism of Belviq.

    If you took the time to find several real patients taking Belviq now, you would find that the average weight loss is over the clinical studies. In addition, you would find patients sleep better, feel better about themselves. A few type 1 diabetics taking Belviq were able to cut the amount of insulin usage in addition to their weight loss. Same thing seen with those that have T2DM.

    The answer to your thesis of "Is this as good as it gets?" is a resounding no! It just continues to get much better from here.

    BTW, I think Contrave will do fine in the market but it has been not even nine months yet and way, way too early to call anything. We are just in the first quarter of the football game with 55 minutes left in the game.. Let's wait until we are at the 55 minute mark to make a much fairer judgement.

  • Report this Comment On March 04, 2014, at 7:45 PM, foolfafa wrote:

    Come out of the closet and defend you coward!

  • Report this Comment On March 04, 2014, at 9:35 PM, MRJOSEPHD wrote:

    Sean,

    You refer to an organization I have never heard of- "American Medication Association"???? You are seriously misinformed and undereducated about Belviq, Eisai and Arena.

  • Report this Comment On March 05, 2014, at 12:52 PM, cliffhanger wrote:

    Motley Fool, what a stupid negative comments all the time on arna, nothing but a bunch of ignorant fools..

  • Report this Comment On March 05, 2014, at 7:16 PM, AlanPithy wrote:

    Belviq have 12 more years of patent life left, before any patent extension strategy, and you call them dead at month 8 of the launch? Seriously, things are just starting to ramp and its this constant need for attention that makes markets so volatile. Let the thing play out naturally. FenPhen was available for sale in 1994, but by 1996 it was selling at quadruple the rate it was in 1994. These things take time and don't happen overnight. Doctors need to be made aware of it and the benefits and safety. Patients too need to understand what they need to contribute to make it work. Insurance companies have to pony up their share - right now a little more than 50% have some sort of coverage but a year from now it should be closer to 80%.

    Belviq can be combined with any other drug (though FDA does not yet allow that on label, doctors combine drugs all the time FDA does not need to bless it) to improve efficacy. Belviq is the only drug to show a significant improvement in diabetes blood markers even among those who failed to lose any weight! This means people who are diabetic or borderline diabetic can benefit from Belviq -- they will benefit more if they actually do work at it - but either way Belviq improved diabetes measurements across the board and with numbers that rival some very expensive anti-diabetes medicines. Smoking Cessation trials are on the way... imagine a drug that will help 1 billion people quit and also help prevent them from gaining weight when they do? No sir this has barely bellied up to the table, let alone started to play serious games. Belviq has incredible long term worldwide potential you just need to let it play out, naturally. You cannot call the tune this early in the dance.

    Oh and, in case you hadn't noticed, the entire medical establishment is in the midst of a major overhaul. Doctors may be a bit distracted by the new rules and policies and procedures but in time they will come across the data from conferences and magazines and reps, and through social media, Belviq in particular is likely to come out the big winner. IMHO it has potential to generate sales similar to that of FenPhen (e.g. 35 million scrips a year) at its peak, maybe higher. Belviq, BelPhen, BelFormin, BelPropion, and Belviq for anti-smoking.... and more to come. Not to mention, ARNA itself has 4 drugs ready to move into Phase II and a 5th drug in phase I. Come back in 2 years, in March of 2016, and see what has transpired. I think ARNA is going to have a great run over the next 24 months.

  • Report this Comment On March 07, 2014, at 12:45 PM, marp11 wrote:

    gee another week

    BELVIQ Trw up 6%

    Q crappy 2%

    eom

  • Report this Comment On March 31, 2014, at 7:01 AM, webmind wrote:

    ARNA $15 - $20 by the end of the year.

    "Many investors appear to be quite bearish on Arena Pharmaceuticals, Inc. (ARNA), especially if you look at the percentage of the float that is sold short for this stock. Currently, 27.3% of the float is sold short, suggesting an extreme level of bearishness for ARNA.

    "However, it is worth noting that earnings estimates have actually been moving higher for the company, despite the pessimism. Thanks to these rising estimates, we have a Zacks Rank #2 (Buy) on ARNA, so we clearly don’t believe in the negativity surrounding this firm, and are instead looking for shares of ARNA to move higher in the weeks ahead."

    That short squeeze will be sweet.

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