I thought Meridia should stay on the market, as did half of an Food and Drug Administration advisory panel and the manufacturer, Abbott Labs
Pulling Meridia off the market -- technically, the FDA asked Abbott to remove the obesity drug, and it said Abbott agreed to -- isn't that big of a deal for Abbott. Meridia's sales were never super-exciting, and Abbott is so large that the lost sales won't have a major effect on Abbott's $33 billion in revenue. This is definitely not comparable to events involving Merck's
The FDA's decision on Meridia should have investors in companies developing new obesity drugs -- VIVUS
Orexigen's Contrave, which will be reviewed in December, might have an advantage in going last, but the FDA will still likely place a strong focus on safety. Considering that Contrave has side-effect issues of its own, there may be nothing the company can do to get past the safety-conscious agency.
Can any obesity drug win the FDA's approval? Sure -- a drug that causes weight loss that's 5 percentage points above placebo, and has side effects that are equivalent to diet and exercise. Anything below that insanely high standard is up for debate about its risk-reward profile. With the FDA leaning heavily toward minimizing risk, investors in the space need to be very careful.
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