But don't jump in ahead of next Monday's decision just yet. While a negative panel vote almost always leads to the FDA turning down a drug, a positive panel doesn't guarantee a thumbs up from the agency. It says so right on the FDA's website: "Although the committees provide advice to the Agency, final decisions are made by FDA."
Obesity isn't as life threatening as idiopathic pulmonary fibrosis or cancer, which pirfenidone and Provenge treat. Diet and exercise work pretty well at helping shed the pounds, and the FDA seems predisposed to be hard on any drug that treats obesity. Just because the advisory panel let Contrave slip by doesn't mean the agency will.
The problem is intensified by the side effects observed in weight-loss drugs that have been pulled from the market after the agency has approved them: Wyeth's fen-phen and Abbott Labs'
While I'm inclined to guess that the FDA will send Contrave back to the drawing board, it's just that -- a guess. Handicapping the FDA's decision on Contrave is more difficult than it was with lorcaserin and Qnexa, where a negative panel was a death sentence for the drug.
In the long run, Contrave -- and lorcaserin and Qnexa -- may be approvable, but investors need to be prepared for a wait.
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Motley Fool Alpha owns 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 Fool has a disclosure policy.