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Vivus's Rejection by Diet Pill Panel Threatens Rival Candidates
Vivus Inc. shares plunged the most ever in New York trading the day after U.S. reviewers recommended against approval of its Qnexa diet pill, a decision that analysts say may threaten makers of competing drugs.
Outside advisers to the Food and Drug Administration voted 10-6 yesterday that the potential risks of depression, birth defects and increased heart rate trumped the weight loss seen with Qnexa. Shares of Vivus, an unprofitable biotechnology company with one marketed product, fell the most since the company’s initial public offering in 1994.
Orexigen Therapeutics Inc. also dropped as investors feared their FDA review later this year may be contentious. The agency hasn’t approved a prescription weight-loss drug in more than a decade, and the panel’s comments highlighted concerns that approval may trigger a potential repeat of the experience with fen-phen, the diet pill pulled in 1997 over heart risks.
“The panel was blinded by the fear of side effects instead of taking a pragmatic approach and recommending a restricted label,” Michael G. King Jr., an analyst at Wedbush Securities who had an “outperform” rating on Vivus shares, said in an e- mail. The decision “sends a bad message to the developers” of rival obesity drugs.
Vivus, of Mountain View, California, fell $6.70, or 55 percent, to $5.41 at 4 p.m. in Nasdaq Stock Market trading. Orexigen, based in San Diego, declined 47 cents, or 9.4 percent, to $4.53. Arena Pharmaceuticals Inc., which makes another rival diet pill, rose 74 cents, or 19 percent, to $4.66.
Learning Opportunity
“While the negative Qnexa panel probably does increase the risk for other obesity agents, we believe the other companies have the opportunity to learn from the panel concerns and avoid the pitfalls that caused Vivus to stumble,” said Steve Yoo, an analyst with Leerink Swann & Co. in New York, in a report today.
Two-thirds of American adults are obese or overweight, raising their risk of diabetes, heart disease, and cancer. The global diet-pill market may reach $10.5 billion by 2018 if the new drugs are cleared, according to Datamonitor Plc in London.
“I was a little surprised that the vote went as it did,” said Eric Colman, the deputy director of the FDA’s Division of Metabolism and Endocrinology Products, in a press briefing after the meeting. He declined to elaborate. While the agency usually follows its panels’ advice, it isn’t required to do so.
Anxiety, Depression
Panel members who voted against Qnexa said longer-term data on safety would make them more comfortable about supporting a drug that may appeal to millions of Americans. A 56-week study showed the treatment helped severely obese people lose an average of 14.7 percent of their body weight, compared with 2.5 percent on placebo. Side effects included anxiety, depression, memory and attention lapses, and increased heart rate.
“As much as I feel for the people who want this drug and want to lose weight, we have to protect the population at large,” said panel member Lamont Weide, chief of endocrinology at Truman Medical Centers in Kansas City, Missouri. “We need longer-term data in the people who are really going to be using the drug out there.”
Qnexa is a once-daily pill that works by using a controlled-release formula of low doses of phentermine and topiramate. The chemicals act on the receptors of the brain that control appetite and fullness.
Topiramate, an anticonvulsant, is the generic form of Johnson & Johnson’s Topamax. Phentermine is an ingredient from the recalled fen-phen, linked to potentially fatal heart valve complications. Topamax can trigger an irregular heartbeat and psychiatric problems led by depression, anxiety and hallucinations.
Side Effects
Side effects for Qnexa are similar to those seen with Topamax and phentermine, and it is the most effective of the three new diet pills, said George Blackburn, associate director of Harvard Medical School’s Nutrition Division. He consulted for Arena in the past year and hasn’t worked with Vivus or Orexigen.
“Stopping the progression of weight gain is a high priority for medical intervention,” Blackburn said July 13 in a telephone interview. “All of the drugs for diabetes and for lipid disorders call for lifestyle changes, and patients would be able to make these changes if they had a drug that would control their appetite.”
“We are disappointed with the advisory committee’s vote,” said LeLand Wilson, Vivus’s chief executive officer, in a statement. The company plans to work with the FDA “to address the labeling and safety questions raised during today’s proceedings.”
Two-Year Data
The company expects data from a two-year extension study of the drug to be available in the current quarter, Wilson said later yesterday on a conference call.
Vivus would need to raise money to fund large outcome studies if they’re required for FDA approval of Qnexa, Leerink’s Yoo said in a telephone interview yesterday.
“It’s not good for Vivus but there still might be a chance that the drug gets approved,” Yoo said in the interview. “It’s definitely going to cast a pall on the other names.”
Vivus reported a net loss of $54.3 million in 2009 and hasn’t recorded an annual profit since 2000, according to company statements and Bloomberg data.
Christopher S. James, an analyst at McNicoll Lewis & Vlak LLC in New York, said in a June 25 research report that Qnexa’s peak annual sales may be $620.9 million by 2015, making it “the leading obesity drug for the foreseeable years.” Yoo estimated that pill’s global revenue may top $1 billion by 2017 if it’s approved.
FDA Decisions
The FDA is scheduled to decide whether to clear Qnexa on Oct. 28, six days after the deadline for Arena’s lorcaserin. Orexigen said it expects a decision on Contrave by Jan. 31.
An advisory panel review for lorcaserin is scheduled Sept. 16, followed by Orexigen Therapeutics Inc.’s Contrave on Dec. 7.
Arena’s lorcaserin is similar to fenfluramine, and binds to the same receptor in the brain that controls appetite, while avoiding a separate target in the heart that was linked to valve damage with the recalled treatment, the company has said. Tokyo- based drugmaker Eisai Co. bought marketing rights to Arena’s drug on July 1.
Orexigen’s Contrave adds a sustained-release version of the smoking-cessation and depression treatment bupropion to naltrexone, used for alcohol and opiate addiction.
“I would like to know more about all of these different compounds before making a decision about any particular one,” said panel member Thomas Bersot, a professor of medicine at the University of California, San Francisco, at the meeting. He voted against Qnexa.
Sales Decline
Sales of prescription weight-loss drugs fell 11 percent last year to $153.7 million, according to the research firm IMS Health Inc. in Norwalk, Connecticut. Of the almost 7.5 million prescriptions dispensed, four of every five were for generic phentermine, still sold as a short-term appetite suppressant.
Roche Holding AG, based in Basel, Switzerland, added warnings to its Xenical drug in May after cases of serious liver injury. Meridia, from Abbott Park, Illinois-based Abbott Laboratories, added warnings in January recommending against use in people with a history of cardiovascular disease because of an increase in heart attacks and strokes. Sanofi-Aventis SA, based in Paris, was rejected by FDA in 2007 for its weight-loss drug rimonabant because of suicide and depression.
“How many more drugs have to bite the dust in this category?,” Sidney Wolfe, health research director of the Public Citizen consumer group in Washington, said in a July 7 telephone interview. “Weight loss is a long-term concern and therefore if someone is arguably going to be taking a drug for a long time you need to have long-term safety studies.”
To contact the reporter on this story: Catherine Larkin in Gaithersburg, Maryland, at clarkin4@bloomberg.net.
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