Phase 2 Data to Sink Your Teeth Into

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Just in time for Thanksgiving, Novo Nordisk (NYSE: NVO) released phase 2 clinical trial data from its weight-loss/diabetes drug, liraglutide. It appears that investors ate it up, given the 4% bump in stock price yesterday.

The announcement was light on data, but provided evidence that liraglutide was more effective at removing the pounds than orlistat, which is marketed by Roche under the name Xenical and over the counter by GlaxoSmithKline (NYSE: GSK) under the name Alli.

As was the case with Amylin Pharmaceuticals' (Nasdaq: AMLN) phase 2 data from its weight-loss combination product released last week, it's hard to draw strong conclusions from a short trial. It's going to take a longer phase 3 trial to get data that's strong enough not only to get FDA approval, but also to persuade patients to use it instead of oral weight loss compounds like Alli and Abbott's (NYSE: ABT) MERIDIA.

Fortunately, Novo isn't counting on the weight-loss data to get liraglutide on the market. It's already completed four of the five planned phase 3 trials to get the drug approved for treating patients with type 2 diabetes. If data from the final trial, which will compare liraglutide to sanofi-aventis' (NYSE: SNY) Amaryl, show results that are similar to previous studies, Novo expects to file a marketing application in the middle of next year.

Once on the market, it would compete against Amylin's BYETTA. Liraglutide should have a competitive advantage, since it's injected once a day versus BYETTA's twice-daily regimen. But Amylin's extended-release version of BYETTA should be on its heels a year later. It looks like the diabetes market is about to get tighter than jeans on a supermodel.

Further weighty Foolishness:

• Pfizer's New Drug for Fat Fidos
• A Diet for Your Wallet
• Work on Your Waist Without Waste