Obesity drugs could become an important part in helping obese individuals lose weight. Reviewers at the National Institutes of Health looked at study patients taking certain U.S. approved obesity drugs, like Qsymia manufactured by VIVUS (NASDAQ:VVUS), for at least one year. Patients on the highest dose of Qsymia were able to achieve weight loss. Other drugs under evaluation for weight-loss benefits include type 2 diabetes drug Victoza, made by Novo Nordisk (NYSE:NVO), and Contrave, made by Orexigen Therapeutics (NASDAQ:OREX).
Obesity has become an epidemic in the U.S. According to the CDC, obese individuals, defined as anyone with a body mass index of 30 or more, account for 35.7% of the U.S. population. Obesity tends to be a risk factor for heart disease, stroke, type 2 diabetes, and certain types of cancer. Between 2009 to 2010, more than 78 million U.S. adults and about 12.5 million U.S. children and adolescents were obese. Worldwide, there are approximately more than 500 million people who are obese. The market potential for these drugs is substantial as long as doctors are convinced these drugs are safe to use.
VIVUS expects sales of Qsymia to increase next year
The data the NIH reviewed on Qsymia, formerly known as Qnexa, showed that trials with at least 50 patients had a 67% to 70% success rate of achieving weight loss. The drug had a rocky journey to received FDA approval. Back in 2010, Qsymia met FDA benchmarks for weight loss but did not receive approval due to safety concerns involving the drug's potential to cause birth defects and an elevated heart rate.
In phase 2 and 3 clinical trials, the drug results showed statistically significant weight loss of about 10% for the highest dose of Qsymia. Improvements were also noted in blood sugar control and improvement in cardiovascular risk factors, when taken along with diet and lifestyle changes. According to VIVUS' latest third-quarter release, Qsymia is available nationwide in more than 31,000 certified retail pharmacies.
Net product revenue from sales of Qsymia was $6.4 million. VIVUS affirms that sales of Qsymia should increase in 2014 due to growth in certified retail pharmacies, expanding reimbursement coverage, and a more focused selling message. The company is focused on eliminating non-essential expenses by the end of this year. For fiscal 2014, VIVUS is expecting to realize $6 million to $8 million in annual net cost savings.
Novo Nordisk's Victoza treats both diabetes and obesity
There's also positive data on diabetes drug Victoza, manufactured by Novo Nordisk. A phase 3a study revealed statistically significant data on the drug's ability to reduce body weight in obese patients without diabetes or overweight patients with pre-diabetes and high blood pressure. The study looked at 3,731 obese patients who completed a 56-week treatment and were later observed for 12 weeks. Sixty-four percent of patients using Victoza achieved a minimum weight loss of 5% and 33% of research participants achieved a minimum weight loss of 10%.
In the third quarter, Novo Nordisk should complete the last phase of the four trials that evaluates the weight loss potential of Victoza in diabetic and non-diabetic patients. The filing for the obesity indication in the U.S. and in Europe should take place by year end. Victoza is currently approved only at lower doses ranging from 0.9, 1.2, and 1.8 mgs for type 2 diabetes. The drug played a part in driving overall sales growth of 8% during the first nine months of 2013. Sales of the drug during the same period rose 28%. The company's net profits rose 22%, and diluted EPS increased 25%. The 3 mg dosage used in this study is pending approval.
Contrave's market launch back on track
Orexigen Therapeutics, makers of obesity drug Contrave, is ready to resubmit the drug's application to the Food and Drug Administration for potential approval of the drug by June. The resubmission is expected to include an interim analysis of cardiovascular research data showing a favorable benefit to risk evaluation of the drug. The FDA had requested additional analysis showing specified criteria that the drug did not pose an excess risk of major adverse cardiovascular events.
Orexigen found that Contrave met the pre-specified criteria, and no new safety issues were noted, making FDA approval of the drug a possibility. With the latest analysis complete, Orexigen, together with North American partner Takeda Pharmaceuticals, are preparing to meet product launch requirements for Contrave. (To read more about Contrave's journey toward FDA approval, check out this article by fellow Fool Brian Orelli.) As the study continues, specific results on the drug's effectiveness have not been released to maintain the integrity of the trial.
In the third quarter, Orexigen posted a net loss of $18.6 million, or -$0.19 per share. A significant improvement over the $30.6 million net loss reported in the third quarter of 2012, or -$0.44 per share. The company's total operating expenses dropped by 38%, as R&D expenses associated with the Contrave study decreased.
My Foolish conclusion
The NIH's conclusion that anti-obesity drugs help patients lose weight could lead to greater use of these drugs by patients that need them. These drugs tend to carry a stigma regarding their safety, so overcoming that hurdle will be important for these companies to convince doctors to prescribe them. With the obesity epidemic continuing to plague many Americans, we may see more companies devoting more research dollars to drug solutions for this problem.
Eileen Rojas has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.