It's been clear for some time that the Food and Drug Administration isn't particularly fond of obesity drugs. It pulled Abbott Labs'
Now it's just being a bully.
Orexigen Therapeutics
As a result of that meeting, Orexigen believes that it would have to run a clinical trial with 60,000 to 100,000 patients to adequately show that the drug doesn't increase cardiovascular risk.
That's right -- 100,000 patients!
That's not even feasible for big pharma, let alone a small company like Orexigen. Cardiovascular drugs such as Merck's
As if the necessary size wasn't bad enough, the FDA said the trial requirements were subject to change after an advisory committee meets next year to discuss cardiovascular assessment for obesity drugs. Do I hear 200,000?
I warned Fools that the news could be bad, but even I wasn't expecting that it would be this bad.
Orexigen plans to appeal the decision to the higher-ups at the FDA, but in the meantime, it's putting its U.S. obesity-drug development on hold. Shares are down 30% today, which is completely warranted given the uncertainty.
VIVUS
Without any heart issues, Arena Pharmaceuticals
Fool analysts think the government will be kinder to these companies. Grab the free report "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke" to find out which ones.