Hurry up and wait.
That's been the story of Arena Pharmaceuticals' (NASDAQ:ARNA) Belviq. The obesity drug was approved back in June, but the biotech's partner Eisai (OTC:ESALY) couldn't launch the drug because it had to wait for the Drug Enforcement Agency to determine how likely the drug is to be abused.
The DEA agreed with the Food and Drug Administration and recommended a Schedule IV designation. But more waiting ensued as the DEA took the standard 30-days of public comments.
The biotech held its fourth-quarter conference call Monday, but investors are still left waiting with no mention of an exact date for when Belviq will be launched. The public comment period ended in January, but the DEA is still reading the comments and hasn't issued its final ruling.
Even after the final DEA ruling, investors could still be left waiting. Technically the DEA can ask for a 30-day waiting period after the final scheduling, although Eisai has asked for that to be waived.
How much the delay helps VIVUS' (NASDAQ:VVUS) Qsymia is debatable. Sure, the biotech has gotten a few months free of competition from other new obesity treatments. But VIVUS may actually benefit from Eisai's promotion to doctors, which need to be educated about the potential health benefits of taking obesity drugs. The drugs may not overlap much either; with its more severe side effect profile, Qsymia is likely to be prescribed to morbidly obese patients while Belviq finds a niche in patients that want a safer medication albeit with less weight loss.
You could argue that the third obesity drug player, Orexigen (NASDAQ:OREX), benefits since it's behind Arena, but probably not by much. The biotech hasn't even resubmitted its application for Contrave. It could take six months after that to get approved. By that time, Qsymia and Belviq will be well into their launches; I doubt the delay will matter that much.