Sept. 9 (Bloomberg) -- Vivus Inc. rose 71 percent, the most in about a decade, after the biotechnology company said its weight-loss drug met U.S. guidelines in two large human trials.

Vivus climbed $4.89 to $11.80 at 4 p.m. New York time in Nasdaq Stock Market composite trading, its biggest gain since Dec. 22, 1999, when the Mountain View, California-based company asked U.S. regulators to clear an erectile dysfunction drug.

Vivus is competing with Orexigen Therapeutics Inc. and Arena Pharmaceuticals Inc., both of San Diego, to introduce a new diet drug in the U.S., a market that might be worth $10 billion annually for a safe therapy that helps patients lose 10 percent of their weight in a year, said Needham & Co. analyst Mark Monane. Global obesity levels, linked to rising rates of diabetes and heart disease, will swell 75 percent to 700 million people by 2015, according to the World Health Organization.

“We would market this drug to people with significant obesity and co-morbidities,” such as diabetes, high cholesterol and high blood pressure, said Leland Wilson, Vivus’s president and chief executive, in a telephone interview today. “This is serious medicine for those with serious disease.”

The Vivus drug, Qnexa, could generate sales of $3 billion by 2016, said Michael King, a New York-based analyst for Merriman Curhan Ford & Co., in an Aug. 20 telephone interview.

“Obesity is one of the last true, broad-based consumer markets where you can get significant revenue,” King said.

Study Results

Two 56-week studies counted patients on Qnexa who lost at least 5 percent of their weight, compared with how many on a placebo pill did the same. In one study, 67 percent of people taking the drug achieved that goal, compared with 17 percent on placebo. In the other trial, it was 70 percent, compared with 21 percent.

The Vivus studies reported today are the final stage of clinical trials generally required to seek U.S. regulatory clearance. The company said it will seek permission to sell Qnexa by the end of the year.

Patients who finished both studies followed a low-calorie diet and lost an average of 6 pounds after a year with a placebo. In one of the two studies, called Equip, people on the highest dose of Qnexa lost an average of 18 pounds when they completed the trial. In the second study, called Conquer, average weight loss on the higher dose of Qnexa was 30 pounds.

Heart and Metabolism

The study also showed “significant improvements” in cardiovascular and metabolic risk factors, including blood pressure, cholesterol levels and type 2 diabetes, Vivus said in a statement.

“To get payers in the health care system to want to pay for these drugs you need to have real benefit in altering these co-morbidities,” Wilson said in the interview. “It puts obesity into a serious disease category that insurers, employers and government want to treat in order to save money, lives and improve quality of life.”

The trials “demonstrated remarkable safety,” Wilson said.

Qnexa combines a generic form of the appetite suppressant phentermine, a commonly prescribed obesity drug that was an ingredient in the recalled diet pill known as fen-phen, with the anticonvulsant drug topiramate, the generic form of Johnson & Johnson’s Co.’s Topamax, which is used to treat epilepsy and migraine headaches.

Greater Effect

While each of the ingredients in Qnexa has some weight-loss impact, the combination of the two “has a greater effect than either of the individual components,” King said.

The positive study data will allow Vivus to accelerate discussions with “major pharmaceutical partners,”, Wilson said in the interview. That partner needs to be in place about six months before the product launch, expected in early 2011, he said.

Arena Pharmaceuticals may be the first of the three companies to ask U.S. regulators to approve its obesity treatment, lorcaserin, when it files “late this year,” Chief Executive Officer Jack Lief told analysts during an Aug. 3 conference call. The company expects to release in September the results of the second of two pivotal, late-stage studies of lorcaserin that will be used to seek approval of the drug.

Lorcaserin is similar to, but chemically different from, fenfluramine, an ingredient in Wyeth’s combination diet-drug known as fen-phen, which was taken off the market in 1997 after being linked to heart and lung problems. Studies so far have demonstrated the Arena drug is well-tolerated by patients and shows no evidence of the heart-valve damage seen in fen-phen users, the company said.

Arena Data

Experimental data released by Arena in June showed lorcaserin met one of two benchmarks required by the U.S. Food and Drug Administration to show a drug’s effectiveness. The treatment helped 48 percent of patients -- or more than twice the comparable placebo result -- lose more than 5 percent of their total body weight, the study found.

The average weight loss after one year for lorcaserin was 3.6 percent more than that of patients on a placebo. The results failed to meet a second FDA standard that an obesity drug has at least a 5 percentage point difference in weight loss between the drug and a placebo.

About 32 percent of Americans adults are obese, according to data from the Centers for Disease Control and Prevention in Atlanta. Medical spending for obesity was $147 billion in 2008, an 87 percent increase over the past decade, according to a government study published July 27 in the journal Health Affairs.

Sanofi Drug

Paris-based drugmaker Sanofi-Aventis SA withdrew its weight loss drug Acomplia from the market in Europe last year after it was rejected by the U.S. Food and Drug Administration over reports of increased psychiatric disorders. New York-based Pfizer Inc. and Merck & Co. of Whitehouse Station, New Jersey halted development of similar drugs.

Amylin Pharmaceuticals Inc., of San Diego, is working on a drug that combines pramlintide, the active ingredient in its diabetes drug Symlin, with leptin, a hormone tied to hunger.

To contact the reporters on this story: David Olmos in San Francisco at dolmos@bloomberg.net; To contact the reporter on this story: Lisa Rapaport in New York at Lrapaport1@bloomberg.net

Last Updated: September 9, 2009 16:14 EDT