Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Yeah, I'd Call That a Confident Recommendation

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

In my preview of the Food and Drug Administration advisory panel reviewing VIVUS' (Nasdaq: VVUS  ) Qnexa, I said the panel members reviewing the obesity drug needed to support the approval of in "confident and outspoken enough terms to convince the agency."

Yeah, I'd call a 20-2 vote in favor of recommending approval confident enough to convince the FDA to approve the drug that it rejected in late 2010.

Ultimately, the panel said, the advantages of weight loss trumped potential heart issues and the risk of birth defects could be managed with a risk-management plan that included female patients taking a pregnancy test.

A positive vote isn't enough to gain approval; it's only a recommendation, after all. A panel recommended approval of Orexigen Therapeutics' (Nasdaq: OREX  ) obesity drug Contrave by a margin of 11-8, but the FDA still sent the company back to the drawing board, ultimately requiring a large per-approval trial that the committee felt could be accomplished after the fact.

The difference for VIVUS could be the magnitude of the vote. The risk of the FDA going against the panel goes down substantially with each vote recommending approval.

But VIVUS still has some work to do. There are details to be worked out for the risk-management plan to ensure pregnant women avoid taking the drug and VIVUS' commitment to do a post-marketing trial to check for heart issues. The latter is likely the bigger worry, since heart problems discovered post-marketing is what brought down both Wyeth's Phen-Fen and Abbott Labs' (NYSE: ABT  ) Meridia. The agency will need to be convinced that data will come in quick enough to limit the number of people being exposed to Qnexa before the trial's results. Abbott's trial for Meridia took seven years to read out, which isn't going to cut it here.

An approval of Qnexa would generally be good news for Orexigen and Arena Pharmaceuticals (Nasdaq: ARNA  ) , which have an obesity drug that's under review by the FDA, since it means the FDA is moving away from its hard-nosed stance on risks. But keep in mind that Qnexa has the best efficacy data of the three, so to meet the new risk-benefit level, the other two drugs will need to be deemed safer than Qnexa. Orexigen can certainly do it with data from its pre-approval heart safety trial. Whether Arena can convince the FDA that its drug's potential cancer issues are just an artifact remains to be seen. We'll know later this year, when another panel of outside experts convenes to review the drug.

While you're waiting to see if Qnexa get approved, take a look at what Fool analysts believe is the next rule-breaking multibagger. Get the free report by clicking here.

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 Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of Abbott Laboratories. 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.

Read/Post Comments (0) | Recommend This Article (4)

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.

Compare Brokers

Fool Disclosure

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: 1788323, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:34:05 PM

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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:00 PM
VVUS $1.12 Down -0.04 -3.45%
VIVUS CAPS Rating: **
ABT $39.96 Down -0.23 -0.57%
Abbott Laboratorie… CAPS Rating: *****
ARNA $1.59 Down -0.02 -1.24%
Arena Pharmaceutic… CAPS Rating: ***
OREX $3.04 Up +0.17 +5.92%
Orexigen Therapeut… CAPS Rating: *