VIVUS Inc. (NASDAQ: VVUS) is getting a bit of a haircut this morning on the heels of some news from the Food & Drug Administration which may throw up some caution for its weight loss pill.
The FDA has now decided to delay its approval decision date by three months (out to July 17) on VIVUS’ obesity pill called Qnexa. VIVUS had submitted the FDA’s requested data on the company’s risk evaluation and mitigation strategy. The new plan was based upon discussions that VIVUS had with the agency after FDA panel advisers voted in favor of Qnexa in late-February. That move sent shares through the roof even though the panel did raise some concerns that Qnexa may potentially contribute to birth defects in pregnant women and due to some heart risks.
As a reminder, VIVUS is in a race with Arena Pharmaceuticals Inc. (NASDAQ: ARNA) and also with Orexigen Therapeutics Inc. (NASDAQ: OREX) to win the first FDA approval for an obesity pill in more than a decade. The weight loss pill market has been riddled with side effects and the history has been less than pleasant. Now the hope is that the obesity epidemic has reached such a large size and has created such a high cost that the FDA will weigh the benefits over the risks.
VIVUS shares were down about 8% around $21.10 on last look on Monday evening after the FDA delay was announced and shares are indicated around $21.15 in early bird trading on Tuesday morning with well over 2 hours until the market opens.
JON C. OGG