In America's ongoing Battle of the Bulge, dieters have been known to resort to extraordinary, and often extraordinarily dangerous, measures to cut the fat. Some Prohibition-era weight loss elixirs used desiccated thyroid extract to rev up the metabolism -- and in the process, destroy the heart. Other popular quick fixes included arsenic, and even a cancer-causing agent found in WWI explosives.

Sound extreme? Many modern weight loss solutions are just as shocking and not much safer. Lest we forget Fen-Phen or Redux, whose miraculous results were overshadowed by the heart and lung problems they were subsequently linked to.

Time and time again, the Food and Drug Administration has gotten burned by these and other diet drugs, with nasty side effects that initially went undetected. So nowadays, it's tougher than ever to get review panels on board.

Earlier this week, Forbes' Matthew Herper argued that obesity drugs are heading for a dead-end, following the FDA's rejection of Contrave from Orexigen. "I just don't see new obesity drugs getting a lot of traction," he wrote. 

Of course, industry insiders disagree, pointing out that there are new strategies being developed to address regulatory concerns.

"I agree that it is likely that it will be years before a new anti-obesity drug gets on the market. However, the obesity field (for drug development) is by no means dead," wrote Olivier Boss, the chief scientific officer of Energesis Pharmaceuticals, a Boston-area start-up that's working to make drugs that increases levels of energy-burning brown fat.

"All anti-obesity drugs/candidates developed to date are "diet drugs" or "appetite suppressants" acting on CNS targets (except Xenical, an anti-fat absorption drug). This was the first generation obesity drugs (following the CNS-targeted amphetamines of the 1970s)."

He goes on: "Knowledge of regulation of energy balance, food intake and energy expenditure (especially thermogenesis) has improved tremendously in the last decade, and new approaches (non-CNS based) are being developed by a few companies. It is still early stage, for sure, but these new strategies are completely novel, and some (like brown fat recruitment) have been well established in many animal models."

Will these recent advances in pharmaceutical research revolutionize the weight loss industry? It's still early days, but here are some of the stocks to watch. (Click here to access free, interactive tools to analyze these ideas.)


Performance Over Last Year

Obesity Drugs Being Developed

Merck (NYSE: MRK)


JANUVIA, Merck's inhibitor for the treatment of type 2 diabetes, recorded worldwide sales of $675 million during the fourth quarter of 2010, representing a 21 percent increase compared with the same quarter in 2009. JANUMET, a single tablet that targets all three key defects of type 2 diabetes, achieved worldwide sales of $288 million during the quarter, an increase of 42 percent compared with the fourth quarter 2009.

Bristol-Myers Squibb (NYSE: BMY)


From their website: Dapagliflozin is an experimental drug being studied by Bristol-Myers Squibb in partnership with AstraZeneca as a potential treatment for type 1 and 2 diabetes. Bristol-Myers Squibb has made obesity a key research and development target and is focusing on discovering and producing drug treatments to help stem the obesity epidemic.

Allergan (NYSE: AGN)


The company has developed the LAP-BAND Adjustable Gastric Banding System, the first adjustable medical device for individualized weight loss and the first minimally invasive surgical approach approved in the United States by the U.S. Food and Drug Administration. Approved outside of the United States, Allergan's portfolio also includes the BIB Intragastric Balloon System, which is a non-surgical alternative for the treatment of obesity.

Amylin Pharmaceuticals (Nasdaq: AMLN)


From their website: The pramlintide/metreleptin combination reflects the tremendous potential of Amylin's integrated neurohormonal strategy in developing novel, safe, and effective new therapies for weight loss. In a proof-of-concept study completed in late 2008, patients treated with a combination of pramlintide and metreleptin reduced body weight on average by 12.7 percent over 24 weeks -- representing an average loss of 25 pounds. Weight loss continued through the end of the study, with no evidence of plateau.

MannKind (Nasdaq: MNKD)


MannKind Corp has been seeking FDA approval for an inhalable form of insulin called Afrezza, which aims to control blood sugar levels in patients with diabetes without meaningful, long-term changes in lung function.

VIVUS (Nasdaq: VVUS)


Qnexa is an investigational, once a day, proprietary, oral, controlled-release formulation of low dose phentermine and topiramate, which is believed to address both appetite and satiety-the two main mechanisms that impact eating behavior. Three pivotal phase 3 trials evaluating Qnexa in over 4,500 patients as a treatment for obesity were recently completed under a Special Protocol Assessment by the U.S. FDA. Qnexa is currently under review by the FDA for the treatment of obesity and is not approved.

PROLOR Biotech (Nasdaq: PBTH)


Recently announced that it has entered into a definitive license agreement with Yeda Research and Development Company for novel technology utilized in the development of long-acting therapeutic peptides and small molecules, termed Reversible PEGylation. The Reversible PEGylation technology has been shown in animal models to significantly enhance the half-life and improve the biological activity of a variety of peptides and small molecules, including the diabetes-related compound exendin-4, the appetite suppressant peptide PYY, the blood pressure controlling hormone ANP and the intravenous antibiotic drug gentamicin.

Orexigen Therapeutics (Nasdaq: OREX)


The company's Contrave, an investigational combination therapy of naltrexone HCl and bupropion HCl, was studied for its ability to help people with obesity initiate and sustain weight loss of at least 5 percent of their starting body weight in one year. The FDA issued a complete response letter dated January 31, 2011, and noted concern about the cardiovascular safety profile of the drug.

Arena Pharmaceuticals (Nasdaq: ARNA)


Arena Pharmaceuticals recently announced it will cut about 25% of its U.S. jobs, or about 66 employees, to conserve cash and focus its resources on getting regulatory approval for its obesity drug. Lorcaserin, the company's experimental obesity pill, was rejected by U.S. health regulators last October citing cancer risks.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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