Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Can Arena and VIVUS Profit From Glaxo's Troubles?

By Brian Orelli, PhD - Mar 31, 2014 at 7:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

GlaxoSmithKline had to recall its obesity drug alli, but it isn't clear if Arena Pharmaceuticals and VIVUS will be able to benefit.

Last week, GlaxoSmithKline ( GSK -0.53% ) announced that it was on recalling its over-the-counter obesity drug, Alli, in the U.S. and Puerto Rico because it appears that some packages were tampered with. The drug remains on the shelf in Europe, where there doesn't seem to be a problem.

In the following video, Fool contributor Brian Orelli and health-care bureau chief Max Macaluso discuss how the issue is reminiscent of Johnson & Johnson's ( JNJ 1.46% ) troubles with Tylenol tampering in the mid-1980s, although GlaxoSmithKline seems to be in much better shape: No one has been hurt from the tampering, and Alli isn't nearly as big of a product as Tylenol was.

Depending on how long the drug remains off the market, the removal of Alli could be a boon to the new prescription obesity drugs Arena Pharmaceuticals' ( ARNA -6.81% ) Belviq and VIVUS' ( VVUS ) Qsymia. While the drugs provide more weight loss than Alli, the biotechs will only be able to gain sales if patients are willing to go to their doctor to get a prescription. The prescription drugs may also be more expensive than Alli, especially since the Belviq and Qsymia still aren't covered by many insurance plans.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GlaxoSmithKline plc Stock Quote
GlaxoSmithKline plc
GSK
$41.25 (-0.53%) $0.22
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$159.38 (1.46%) $2.29
Arena Pharmaceuticals, Inc. Stock Quote
Arena Pharmaceuticals, Inc.
ARNA
$49.55 (-6.81%) $-3.62
VIVUS, Inc. Stock Quote
VIVUS, Inc.
VVUS

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.