Weight Down. Stock Price Up. Really Up.

Looks as though VIVUS (Nasdaq: VVUS  ) is equipped to conquer.

This morning, the company released data from two phase 3 trials -- named Equip and Conquer -- for its anti-obesity drug, Qnexa, and quite frankly, the drug looks outstanding.

In one study, patients at the highest dose in one study lost a placebo-adjusted 9.4% of their body weight. In the other, where patients were less obese, they lost a placebo-adjusted 8.6% of their body weight.

The other key measurement that the Food and Drug Administration uses to determine efficacy is the amount of patients that lost at least 5% of their body weight. That data looked just as good. In both studies, more than three times as many patients who completed the trial on the highest dose were able to achieve the 5% goal compared with placebo.

Just as importantly, the side effects seem to be mild. VIVUS's big brothers, Pfizer (NYSE: PFE  ) , Merck (NYSE: MRK  ) , and sanofi-aventis (NYSE: SNY  ) all stopped development of their weight loss drugs because of adverse side effects.

Despite the lack of red flags, the FDA is still likely to scrutinize the safety data heavily. Qnexa is a combination of one of the drugs in Wyeth's (NYSE: WYE  ) fen-phen -- albeit not the part that's believed to cause heart problems -- and the active ingredient in Johnson & Johnson's (NYSE: JNJ  ) migraine and epilepsy drug, Topamax, which has side-effect issues of its own.

VIVUS said it plans to submit the data to the FDA by the end of the year, a timetable that could put it slightly ahead of Arena Pharmaceuticals (Nasdaq: ARNA  ) and Orexigen Therapeutics, which are also developing weight-loss drugs.

There's probably plenty of room to run -- even after VIVUS' monster 70% gain today -- if Qnexa gets past the FDA, but because a decision won't happen until late next year, investors might as well take their time and wait to see how Arena's data turns out later this year before jumping into VIVUS.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a Motley Fool Inside Value recommendation. Johnson & Johnson is an Income Investor pick. The Fool has a disclosure policy.


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  • Report this Comment On September 09, 2009, at 6:50 PM, PhillyDan wrote:

    Arena will announce their Blossom data by the end of September 2009. They will file NDA on or about December 1st of 2009. They have an excellent safety profile with significant testing done for heart valvupathopy which I don't believe was done by Vivus for Qnexa (maybe the FDA didn't require it but you think they would be curious...). I predict Blossom results will continue to show the excellent safety profile and predict that efficacy results will be better. Maybe not as good as the Vivus' efficacy results but in the ballpark along with a very excellent safety and tolerability profile.

  • Report this Comment On September 10, 2009, at 3:04 PM, dawnamo wrote:

    I'm betting on Arena as well. What Vivus doesn't want you to know about Qnexa is that Topamax makes you stupid. I use in in my practice a lot and it causes peripheral neuropathy and cognitive problems that make it very limited. Also, once they establish the combo works (and weight loss doctors already are using this combo frequently so it's not really news) there is nothing to stop doctors from prescribing the two pills in generic (and cheaper) forms.

    This will be a serious problem for them because insurance doesn't pay for weight loss drugs and when you prescribe a branded drug to patients who need to pay out-of-pocket they complain. As a doctor, you look for a solution and in this case it is obvious. It's depends on their pricing structure but the generics together would cost a patient about $70/month. Qnexa isn't going to get rich competing with that. I'd even consider waiting for a run up and then shorting the stock. I don't know this for sure but I don't think that combo pills have been wildly successful in the past in general. Arena has a safe new class of medication for a severe illness.

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