Can Arena and VIVUS Profit From Glaxo's Troubles?

Last week, GlaxoSmithKline (NYSE: GSK  ) announced that it was on recalling its over-the-counter obesity drug, Alli, in the U.S. and Puerto Rico because it appears that some packages were tampered with. The drug remains on the shelf in Europe, where there doesn't seem to be a problem.

In the following video, Fool contributor Brian Orelli and health-care bureau chief Max Macaluso discuss how the issue is reminiscent of Johnson & Johnson's (NYSE: JNJ  ) troubles with Tylenol tampering in the mid-1980s, although GlaxoSmithKline seems to be in much better shape: No one has been hurt from the tampering, and Alli isn't nearly as big of a product as Tylenol was.

Depending on how long the drug remains off the market, the removal of Alli could be a boon to the new prescription obesity drugs Arena Pharmaceuticals' (NASDAQ: ARNA  ) Belviq and VIVUS' (NASDAQ: VVUS  ) Qsymia. While the drugs provide more weight loss than Alli, the biotechs will only be able to gain sales if patients are willing to go to their doctor to get a prescription. The prescription drugs may also be more expensive than Alli, especially since the Belviq and Qsymia still aren't covered by many insurance plans.

Everything you need to know about Obamacare
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This free guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.


Read/Post Comments (0) | Recommend This Article (0)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2897685, ~/Articles/ArticleHandler.aspx, 9/3/2014 12:55:43 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement