The Side Effect of Developing Obesity Drugs

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Abbott Labs' (NYSE: ABT  ) Meridia is supposed to make patients healthier by helping them lose weight, but it looks like it's having the opposite effect in some patients.

In a large 10,000-patient study, the obesity drug apparently increased the chance of a cardiovascular-related event, like heart attacks or strokes. The Food and Drug Administration said it's looking further into the issue, but didn't make any formal recommendation on Friday.

Will it affect sales of Meridia? I doubt it. According to Abbott, most of the patients in the study had cardiovascular issues already, and it appears that Meridia may be exacerbating the problem. Plus, the drug already has a warning that it shouldn't be used in patients with a history of cardiovascular disease, and it's not clear how the cardiovascular side effects would affect patients with a healthier heart.

Besides, a decrease in sales probably wouldn't have an effect on Abbott anyway -- the company doesn't even break out sales of Meridia, presumably because they're too low to bother.

On a larger scope, the FDA warning highlights the challenge that Arena Pharmaceuticals (Nasdaq: ARNA  ) , VIVUS (Nasdaq: VVUS  ) , and Orexigen Therapeutics (Nasdaq: OREX  ) are going to have getting their obesity drugs past the FDA.

The problem here is that there is already a very good treatment for obesity: diet and exercise. Except for the occasional shin splint, turf toe, and irritability from eating salad for the seventh time this week, the side effects are fairly mild.

Now some will argue -- rightfully so, in my opinion -- that diet and exercise aren't being used, and we need drugs to make it easier to shed the pounds, even if they come with a higher safety risk than diet and exercise. Unfortunately, the FDA may not see it that way.

While the drugs, especially VIVUS' Qnexa, clearly work, investors need to be aware that approval isn't a regulatory slam dunk. It's hard to prove that side effects don't exist, and the FDA is likely to remain extremely cautious in approving new obesity drugs.

Side effects are the reason why big pharmaceutical companies such as sanofi-aventis (NYSE: SNY  ) , Pfizer (NYSE: PFE  ) , and Merck (NYSE: MRK  ) dropped development of their obesity drugs, and they're the reason investors should be careful when investing in this space.

Drug development may be risky, but investing in it can earn you the highest possible returns.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a recommendation of the Inside Value newsletter. The Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (4)

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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 November 23, 2009, at 7:38 PM, pdgcwood wrote:

    Putting all drugs for a particular condition in the same basket relative to side effects is irresponsible journalism. Also, stating potential negatives without also presenting the positive side is nothing more than presenting a biased perspective. the deleterious effects of obesity are not questioned and the benefits of weight loss for conditions such as heart disease, diabetes and arthritis are also well substantiated. Drugs that can help result in weight loss will not only extend lives but also the quality of life. Rather than just casting doubt, how about a little support for potential positive outcomes?

  • Report this Comment On March 23, 2010, at 6:02 PM, PhillyDan wrote:

    Brian is wrong in stating that Qnexa is the clear winner in weight loss. Lorcaserin by Arena also has good weight loss numbers. The top responders or top 25% of patients in both the Bloom and Blossom studies lost more than 16.4% or 35 pounds+, this is very close to the Qnexa number for top responders, with one major difference that never gets mentioned - the Lorcaserin studies had many more patients in them than for Qnexa and for Orex's Contrave.

    In addition, anybody who claims to be knowledgeable in this area needs to take a closer look at the placebo results for Qnexa. The phase III studies had a 500 calorie deficit diet per day which if followed correctly would lead to a one pound a week weight loss or 56 pounds for the 56 week study. Yet the placebo group weight loss numbers were low when you would expect them to be higher? I know because I'm on Jenny Craig which is a 500 calorie per day deficit diet and I have lost 13 pounds in less than 13 weeks.

    Brian and other people who write articles on the obesity drugs need to do better research and what i call "peeling back the onion" on the results. I have done that analysis and without a doubt, Lorcaserin is the most effective weight loss drug. Effectiveness needs to include efficacy, safety and tolerability and Arena's Lorcaserin stands out in all three legs of the effectiveness stool.

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