A Shrinking Obesity Market

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VIVUS (Nasdaq: VVUS  ) plans to send its obesity drug Qnexa back in front of the Food and Drug Administration next month. You'll recall that the FDA took issue with the fact that one of the ingredients in Qnexa -- topiramate, the active ingredient in Johnson & Johnson's (NYSE: JNJ  ) Topamax -- might cause birth defects. VIVUS said the company "reached agreement" with the FDA on a plan to seek approval just for men and women without child-bearing potential before completing Fortress, its retrospective study examining the effects of topiramate on fetuses.

What exactly "reached agreement" means is only clear to those in the meeting between the company and the agency. Was it a "sure we'll look at the data, just send it in along with the PDUFA fee"? Or a more reassuring "most of the patients in your clinical trials were women, but you still have enough data to justify approving it for a group of patients that you didn't run a large prospective trial on"?

I have a hard time imagining the FDA saying the latter, but who knows.

By excluding women of child-bearing age, VIVUS says that it'll lose less than a quarter of the potential obese and overweight population that would be eligible to take Qnexa. While I don't doubt its claim, the fraction it would lose of those who would actually take the drug -- as opposed to those who would be eligible to -- is probably much greater, if the enrollment in the clinical trial is an indication of demand. In one of its pivotal trials, 83% of the subjects were women with an average age of 43.

Even if this is a shot in the dark at a much smaller indication, it's not the worst idea I've heard. If Qnexa's potential is only 10% of what it could be with a full indication -- just a guess -- it's still a decent-sized market. And some revenue from a drug is better than no revenue, especially for a company the size of VIVUS.

Resubmitting also allows the company to get formal feedback from the FDA on the other issues in the complete response letter, including potential heart problems. The agency told fellow obesity-drug maker Orexigen Therapeutics (Nasdaq: OREX  ) that it would have to run an insanely large trial to prove that its drug wasn't causing heart problems. Will VIVUS and Arena Pharmaceuticals (Nasdaq: ARNA  ) be held to the same standard?

It just seems like this is a no-lose situation for VIVUS -- besides the $770,000 or so for the PDUFA fee, of course. If Qnexa gets approved, great. If not, VIVUS will have a better understanding of what it needs to do when it's able to resubmit after its Fortress study is validated in the third quarter of 2012.

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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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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 September 17, 2011, at 12:46 AM, Blindnomore wrote:

    The truth about this drug is that it does cause birth defects. In particular of the palate of the mouth. Plus the phentermine half of the drug probably does cause heart problems of some sort. It is after all an amphetamine. As for your obvious bashing of Arena and even more obvious inability to either perform due dilligence or the choice to ignore the facts about their drug, I say shame on you. I am not surprised though, all you hedge fund lackeys have your agenda and it is not about anything but to line your pockets, not the truth. The truth is that Arena doesn't need to do a larger study group because they did that with their Bloom and Blossom groups. Where Vivus and Orex had minimal numbers of participants,Arena had many many more participants for the sole purpose of cutting that issue off before it turned into a problem like it did for Orex and did for Vivus too. Arena did this in order to gather a better idea about any safety issues. So how did they convince the FDA to go back on their own requirement cited in Vivus' CRL? Not how Vivus has somehow (my bet is they gave a big enough bribe) been able to get a review allowed before it's normal turn in the line. With the latest info on Arena being able to completely set aside all the BS lies concerning "rat tumors" should be what this article covers. But like I mentioned, you guys never do any due dilligence, you just do as your hedge fund masters tell you to write.

  • Report this Comment On September 18, 2011, at 1:50 PM, PhillyDan wrote:

    Just as Blindnomore wrote, Arena had 3 phase III studies with about 8000 people in the combined studies. Bloom-DM was comprised of all T2DM patients.

    There were extensive echocardiograms taken at baseline and at six months intervals for each of the people in these studies. None of the studies showed SS incidences of any heart-related issues. Heart rate and Blood pressure did not increase and in fact had decreased in most patients taking the drug vs. placebo.

    More importantly, there were no SS incidences of valvulopathy.

    Your comment about Vivus and Arena being held to the same standard as Orex is ridiculous, particularly in the case of Arena. Orex showed both HR and BP increases vs. placebo in their studies, as written above, Arena did not with a much larger number of people in the Arena phase III studies.

    As indicated by BNM, Arena powered the Bloom and Blossom studies to rule out valvulopathy. Which they did.

    Brian, I keep bringing this up whenever I respond to someone like you about the FDA's "Obesity Project".

    "The Center for Drug Evaluation & Research is working with George Washington University as a "neutral convener" to rethink weight loss drug development standards. That may make for an unexpected legacy from the wave of failed weight loss candidates from 2010: a whole new approach to drug development guidance from FDA."

    A good part of this project is to for GWU to meet with panels of obese patients in which they will determine what level of risk they are willing to take with respect to a weight loss medication, knowing that losing 5% or greater of their weight will provide them with many benefits. GWU will also meet with medical doctors that treat obesity and diabetes, advocacy groups that are promoting new treatments for obesity, etc.

    This shows that the FDA is changing their attitude towards weight loss drugs. Yes, they want safety, but based on what they hear from obese people and medical doctors, they may allow a bit more risk with medications that treat obesity, particularly when the benefits of the medication outweigh the risks for a majority of people.

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