Glory for Vivus After Arena


Following a dry spell of thirteen years, the US Food and Drug Administration (:FDA) approved two obesity drugs in the space of one month. After approving Arena Pharmaceuticals, Inc.’s (ARNA) Belviq last month, the FDA cleared Vivus, Inc.’s (VVUS) weight-loss drug Qsymia, formerly known as Qnexa.

The FDA cleared Qsymia as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese (Body Mass Index, or BMI, >30) or overweight (BMI >27) adults suffering from at least one weight-related co-morbid condition.

Management at Vivus stated that Qsymia is the first obesity drug to be cleared as a combination therapy (once daily). Qsymia, a combination of two drugs - phentermine and topiramate, is expected to be launched by year-end. We note that FDA approval for Qsymia was based on data from two randomized, double-blind, placebo-controlled, phase III studies namely EQUIP and CONQUER.

Approval was granted with a Risk Evaluation and Mitigation Strategy (:REMS) and post-marketing requirements. The REMS will keep doctors and pregnant ladies informed about the risks associated with Qsymia to the unborn baby.

FDA approval gained in the second attempt

We note that success with Qsymia did not come easily to Vivus. The company did not taste success in its first attempt to gain FDA approval for Qsymia. The US regulatory body issued a complete response letter (CRL) to the company in October 2010 in response to the new drug application (:NDA) submitted in December 2009. The FDA accepted the re-submitted NDA in the final quarter of 2011 and assigned a target date of April 17, 2012.

In February 2012, an advisory panel of the FDA voted 20-2 in favor of approving Qsymia on the basis of a favorable risk-benefit profile of the drug. The action date was pushed back by three months following Vivus’ submission of the REMS for Qsymia in the first week of April. The REMS was a major amendment to the NDA. The FDA approved the drug on the new action date of July 17.

We note that Qsymia is under review in the EU.

Neutral on Vivus

Even though the FDA approval of Qsymia is a huge boost for Vivus, we prefer to remain on the sidelines with a neutral view on the stock until the drug hits the market. Our long-term Neutral recommendation is in line with the Zacks #3 Rank (Hold rating) carried by the company in the short run. We note that Orexigen Therapeutics, Inc. (OREX) is also developing a candidate targeting the lucrative obesity market.

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