Courtesy of Benzinga.
Americans have gotten so irreversibly out of shape that the markets think we are going to need a whole lot of drugs to get a handle on ourselves. Regulators are picking up on this, as they appear ready to open up to new offerings. For the first time since 1999, when Swiss drug-maker Roche brought Xenical gained approval, FDA may be compelled to loosen the market gates.
A federal panel offered overwhelming support on Wednesday for Qnexa, a weight-loss drug by VIVUS (NASDAQ: VVUS). Analysts believe the FDA may be inclined to heed their opinion. Market roared on the news, propelling shares to double their closing price from yesterday.
The effect is wearing off well on two other drugmakers that are also coveting the first approval in 13 years. While not quite as ebullient as Vivus, Orexigen Therapeutics (NASDAQ: OREX) and Arena Pharmaceuticals (NASDAQ: ARNA) are also seeing notable gains. Both have anti-obesity drugs under development.
Orexigen is currently at work on Contrave, which is being submitted to a 10,000-patient study of its efficacy. The study is a follow-up on the original application for market approval, which was rejected in February 2010 by FDA, on concerns that the drug posed cardiovascular risks to users. The program has since been restarted, and could potentially see regulatory greenlight by 2014.
Arena Pharmaceuticals’ Iocaserin, on the other hand, may gain approval within 2012, if all goes well. Like Qnexa and Contrave, Iocaserin has also been rejected before by the FDA. But unlike the other two, which are a combination of existing and approved compounds, Iocaserin is a “novel” drug, according to Seeking Alpha.
The tides on obesity-related pharmaceuticals are turning as obesity is now increasingly seem more as a disease than a lifestyle condition. Obesity is now accepted as an ailment resulting from hard-to-escape entrapments of modern life. Harvard Health Publications identified two such factors: work and recreation.
Less than 20 percent of jobs in the U.S. today require heavy physical work--compared to over 50 percent half a century ago--making for less energy expenditures during the major portion of a person’s waking life.
Even more alarming are our recreation choices for the time that is left in our day. Facebook, among others, has increasingly taken people away from sports courts or other energy-intensive activity in exchange for the sedentary interaction in front of our computers.
So how big is the market for anti-obesity drugs is supposed to get? GlobalData puts its current size at $1.4 billion, currently habitated by Roche’s Xenical and Abbott’s Medira. Annual growth rate is estimated to be at 11.7 percent, pending safe development and approval of any or more of the drugs currently in development. This puts market size at 3.1 billion by 2016. In US alone, 68 percent of the people are estimated to be either overweight or obese, so FDA’s approval clearly holds the key to a great portion of that market.
VVUS is currently up 87 percent over yesterday’s close, whereas OREX and ARNA are up 17.1 and 1.1 percent, respectively.