All Eyes on the Obesity Prize

With two new drugs on the way and more in the pipeline, Big Pharma is hoping weight-loss treatments are worth their weight in gold

Obesity has been a headline-grabbing disease for at least five years now. Yet there hasn't been a headline-grabbing drug to treat it -- until now. At least two ground-breaking antiobesity drugs will likely get clearance from the U.S. Food & Drug Administration before the year is out. Pharmaceutical companies already are heralding the birth of a multi-billion dollar business -- one that will give proponents of low-fat food and the exercise industry a run for their money.

"There's enough information now that diet and exercise isn't working for a vast majority of people," says Madelyn Fernstrom, director of the Weight Management Center at the University of Pittsburgh Medical Center. "If there ever was a market ripe for a good obesity drug, now is the time."

Physicians in the U.S., and their patients, will soon have a choice of not just one, but two anti-obesity treatments. One drug is Sanofi-Aventis' (SNY) rimonabant, which will be marketed under the name Acomplia. The medicine suppresses the receptors in the brain that cause people to crave fatty foods. The other drug is GlaxoSmithkline's (GSK) Alli, which could win FDA approval as early as this summer. Alli is essentially the over-the-counter version of Xenical, (generic name is orlistat) a prescription medicine already available. Xenical works by blocking the amount of fat absorbed through the digestive system.


  So why are people so excited about these two drugs? In trials of Acomplia, those taking the drug shed between 5% and 10% of their body weight if they stayed on the drug for two years -- not enough to spark a run on Brazilian bikinis, perhaps, but sufficient to lower the risk of diabetes and cardiovascular disease in morbidly obese people. What's more, patients on the drug suffered minimal side effects. Those taking Alli, meanwhile, had to put up with some diarrhea and flatulence.

Still, Glaxo is betting that the drug will attract overweight people who have hesitated to go to their physicians for help. According to Malesia Dunn, spokeswoman for Glaxo SmithKline's consumer health-care division, the recommended dosage for Alli is 60 mg., which is half that of Xenical. And while Dunn said that the company is still working on a price, experts are betting it will be around 60 cents a pill, less than half what pharmacies charge for the prescription version, which is often not covered by insurance.

It's no wonder drug companies see opportunity in obesity treatments. Here is a widely prevalent chronic condition for which there is now, at last, treatment, but no cure, much like heart disease or diabetes. Government figures show that two-thirds of Americans are overweight and 30% of those are obese. It's no surprise dozens more such drugs are in the pipeline.


  According to Evaluate, a pharmaceutical consultancy in London, 26 new treatments are already in clinical trials and 32 more in early stage development. "Obesity is really hitting the consciousness today as a major medical problem that if it's not tackled early can lead to life-threatening conditions," says Dr. Jonathan de Pass, CEO of Evaluate.

While it is true that pharmaceutical companies are answering a medical need, it's also clear that they're hoping to exploit the American psyche. "In this culture everybody wants a quick fix, an instantaneous way to a healthier body without too much pain," says Wendy Liebmann, principal at New York City-based consulting firm WSL Strategic Retail.

That means drugmakers will be going head-to-head with the food companies that are filling supermarket aisles with low-fat concoctions. Or bariatric surgeons and gyms, whose business has picked up along with the rise and focus on obesity-related illnesses. Lisa E. Bolton, assistant professor of marketing at the University of Pennsylvania's Wharton Business School, who has conducted a study on the effect of weight management drugs says: "Weight management drugs lead people to eat less low-fat foods and exercise less."


  Drug companies know that the diet market also can be plagued with risks. Remember "fen-phen"? The popular over-the-counter drug combo was pulled from the market in 1997 after it was linked to life-threatening heart valve problems. Drug manufacturer Wyeth (WYE), which made one of the compounds, Redux, has since settled over $20 billion in claims.

Also, neither of these drugs offers a magic cure. As with most diet pills, people will have to continue to watch what they eat and exercise if they want to keep the weight off. Which is why not everyone believes they will mark a watershed in the way Americans deal with obesity.

"The drugs have to truly take the hard work away from you to be truly revolutionary," says Carol Davies, partner at innovation marketing consulting firm Fletcher-Knight in Greenwich, Conn. Then again, given the size of the potential market and barring any unexpected and unpleasant side-effects, Sanofi and Glaxo should be ringing up sizeable profits soon.