NEW YORK, NY--(Marketwire -05/02/12)- A new study shows that medical costs as a result of obesity is nearly double that of previous estimates, and even higher than those caused by smoking. As a result Biotech companies are looking to cash in on the anti-obesity drug market. Biotech companies are in a race to bring the first weight-loss pill to the market in nearly 13 years. Five Star Equities examines the outlook for companies in the Biotechnology Industry and provides equity research on Orexigen Therapeutics, Inc. (OREX - News) and Human Genome Sciences (HGSI - News).
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Approximately one-third of U.S. adults and nearly 17 percent of youth were obese in 2009-2010 according to a report by the Centers for Diseases Control and Prevention. The Nation's obesity problem has been a growing concern for many years now. It has gotten so bad that hospitals are replacing wall-mounted toilets with floor models to support obese patients. The U.S. health care reform law of 2010 allows obese employees to be charged between 30 to 50 percent more for health insurance if they fail to take part in a "qualified wellness program." Cawley and Chad Meyerhoefer of Lehigh University after a recent study calculated that obesity adds $190 billion in health costs, 20.6 percent of U.S. health care expenditures.
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Orexigen Therapeutics' anti-obesity drug, Contrave, was rejected by the FDA at the start of 2011. The FDA had asked the company for more data proving that the drug could help patients lose weight without risking their cardiovascular safety. The company reported in February that they have received a Special Protocol Assessment (SPA) from the FDA.
Human Genome Sciences last month announced that their type 2 diabetes drug Albiglutide, which was licensed to GlaxoSmithKline in 2004, received topline results from seven of the eight "harmony" Phase III studies. HGS is entitled to fees and milestone payments that could amount to as much as $183 million -- including $33.0 million received to date -- in addition to single-digit net royalties on worldwide sales if albiglutide is commercialized.
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