FDA to Review Vivus Drug - Analyst Blog

The US Food and Drug Administration (FDA) recently posted briefing documents on its website ahead of the review of

(

) obesity drug Qnexa by the FDA’s Endocrinologic & Metabolic Drugs Advisory Committee. While the FDA said that all three doses of Qnexa were efficacious for weight loss, the agency has raised questions regarding certain safety issues.

The FDA has highlighted five areas which will be discussed by the panel. These include psychiatric-related and cognitive-related adverse events, metabolic acidosis, cardiovascular events and the effect of the drug on pregnant women. We believe the main focus will be on increased adverse event reports of depression, anxiety, and sleep disorders and the potential clinical significance of the increase in heart rate. The advisory panel will be meeting on Jul 15 to discuss these issues.

Qnexa, Vivus’ lead pipeline candidate, is a proprietary oral drug candidate that combines two previously approved products, topiramate and phentermine, to employ a dual mechanism to treat obesity. Qnexa is designed to address the excess appetite and high threshold for satiety that impact eating behavior.

A favorable recommendation on Qnexa from the advisory committee would be a major positive for Vivus. The obesity market represents huge commercial potential for Vivus. Obesity is the second leading cause of preventable death in the US and it is estimated that the potential worldwide pharmaceutical market for obesity could approach $5 billion annually.

The Centers for Disease Control and Prevention (CDC) estimates that over 112,000 deaths each year are attributable to obesity. Moreover, Americans spend more than $30 billion annually on weight-loss products and services.

Currently available treatments for obesity include orlistat, sold by

(

) as Xenical and by

(

) as Alli (available over-the-counter) and

(

) Meridia (sibutramine). A commercially available prescription product with better efficacy than existing products and lower side-effects has the potential to take sizable market share from existing products.

Besides Vivus, companies like

(

) and

(

) are developing drugs that aim to compete directly with Qnexa. While a response on Orexigen’s Contrave will be available by January 2011, a final response on Arena’s lorcaserin should be out in late October 2010.

We currently have a Neutral recommendation on Vivus. The upcoming advisory committee meeting for Qnexa is a major event for the company. The stock was up 16.8% following the posting of the FDA briefing documents with investors expecting a positive recommendation from the advisory panel.

While the FDA is not required to follow the advisory panel’s recommendation, it usually does so. Vivus should receive a final response from the FDA on Qnexa’s approvability by Oct 28, 2010.