Vivus Gains on Indication FDA May Clear Obesity Drug

Vivus Inc. rose the most in 13 months in Nasdaq trading after U.S. regulators didn’t ask for additional trials of its experimental diet pill Qnexa, indicating the drug may be approved as early as next year.

The Mountain View, California-based company jumped $1.62, or 26 percent, to $7.75 at 4:01 p.m. New York time in Nasdaq Stock Market composite trading, its biggest percentage gain since Sept. 9, 2009. Vivus said yesterday that the Food and Drug Administration had safety questions about Qnexa.

Vivus has been in a race with Arena Pharmaceuticals Inc. and Orexigen Therapeutics Inc. to introduce the first prescription diet pill in more than a decade for the estimated one-third of Americans with obesity. The FDA asked for more in- depth information on Arena’s drug last week and is scheduled to decide on Orexigen’s product by Jan. 31.

“Vivus indicated they’re going to respond very quickly” to the FDA’s questions, said Ian Sanderson, an analyst with Cowen & Co. in Boston, in a telephone interview today. “Most people thought that a longer-term cardiovascular safety trial would be required.”

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 sense of fullness. The drug helped patients lose an average of 26 pounds (12 kilograms), or 11 percent of their body weight, in a two-year study released last month.

Birth Defects Risk

Outside advisers to the FDA recommended against approval in a 10-6 vote in July over concerns that Qnexa may cause birth defects and increased heart rate. The FDA asked the company yesterday to submit the two-year study results, evidence that the drug doesn’t increase the risk of major cardiovascular side effects, and a plan to prevent use during pregnancy.

Vivus Chief Executive Officer Leland Wilson said he anticipates the company will respond to the FDA within six weeks, and then the agency will take two to six months to consider the information before making an approval decision.

“The request for information by the FDA was clear and specific,” Wilson told analysts and investors today on a conference call. “We believe we can address all the FDA’s questions with the information that currently exists.”

Competitors Focus

Vivus had more than $155 million in cash reserves in September, a sufficient amount to get through the remainder of the FDA approval process, Wilson said.

Qnexa sales may reach $450.9 million in 2015, according to the average estimate of three analysts surveyed by Bloomberg. Vivus sold global rights to its only marketed product, Muse for erectile dysfunction, to Meda AB of Solna, Sweden, this month.

Safety and patent concerns have left Vivus as the only one of the three companies developing weight-loss drugs without a marketing partner. Arena partnered its lorcaserin pill with Tokyo-based Eisai Co., and Orexigen teamed up with Takeda Pharmaceutical Co. of Osaka, Japan, on its Contrave pill. Both Arena and Orexigen are based in San Diego.

The FDA hasn’t approved a prescription weight-loss drug since Xenical, from Roche Holding AG in 1999. Safety issues have spelled the demise of medicines for losing weight, including Wyeth’s fen-phen in 1997, Sanofi-Aventis SA’s rimonabant in 2007 and Abbott Laboratories’ Meridia this month.

To contact the reporters on this story: Meg Tirrell in New York at mtirrell@bloomberg.net; Catherine Larkin in Washington at clarkin4@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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