Don't think of pink elephants. They don't exist, so there's no reason to think about them.
Did I succeed in keeping you from thinking about them? No? That worked probably about as well as VIVUS' (Nasdaq: VVUS) attempt to convince investors to ignore the data from its FORTRESS study. Shares are down 15% today.
FORTRESS -- Fetal Outcome Retrospective TopiRamate ExpoSure Study, for those playing the acronym lottery at home -- is a retrospective study to determine the prevalence of oral clefts and major congenital malformations in babies born to women that took topiramate during their pregnancy. Topiramate is the active ingredient in Johnson & Johnson's (NYSE: JNJ) epilepsy medication Topamax, but it's also in VIVUS' obesity drug Qnexa. The Food and Drug Administration asked VIVUS to look at medical records of mothers and babies to determine the risk to pregnant women that might take the drug.
The data for patients taking topiramate pretty much jived with what was expected. Patients taking topiramate during pregnancy were about twice as likely to deliver babies with oral clefts than epileptics that had taken the drug before the pregnancy, but not during it.
But -- and this is where VIVUS would like you to just skip to the next paragraph -- when the company compared patients to a matched group of infants of women with similar medical profiles, the prevalence ratio was 5.44, much higher than would be expected. VIVUS thinks the problem is that the control group just happened, by chance, to be lower than it really is. The rate is pretty low -- just nine oral clefts in the entire population studied -- so just a few extra would have changed the rate substantially.
I think VIVUS is probably right; the low control probably was just a fluke. But investors are right not to ignore it. The company has to convince the FDA that one study group should be ignored, but the others are OK. Not an easy argument to make.
That goes quadruple for a drug like Qnexa, where the FDA is even more safety conscious than it is normally since the competing treatment -- diet and exercise -- has few side effects. Arena Pharmaceuticals' (Nasdaq: ARNA) lorcaserin and Orexigen's (Nasdaq: OREX) Contrave weren't approved on their first attempt because of safety issues, and Abbott Labs' (NYSE: ABT) Meridia was pulled off the market for the same reason.
This data isn't a Qnexa killer, but it's going to make VIVUS' uphill battle a little steeper. Investors still hopeful that Qnexa will get approved beyond men and women who can no longer get pregnant might need a drink right now. I'd suggest a pink elephant: 2 ounces of gin with a splash of grenadine.
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