Vivus Surges on Potential Approval for Weight Loss Drug

Shares of VIVUS, Inc. (NASDAQ:VVUS) are surging over 90% in morning trade after the company said that the U.S. Food and Drug Administration Endocrinologic and Metabolic Drugs Advisory Committee recommended its weight loss drug Qnexa be granted marketing approval by the FDA for the treatment of obesity in adults. The Committee voted 20 to 2, on the recommendation for an approval based on a favorable benefit-risk profile.

While the FDA isn’t required to follow the panel’s recommendation, it often does. Several panel members said Qnexa would be prescribed for millions “if not tens of millions” of people, wrote Christopher James, a New York-based analyst for MLV & Co., in a note to investors today. Once approved, Qnexa carries the potential to become “the next Lipitor,” James wrote. Lipitor, made by New York- based Pfizer Inc.,(NYSE:PFE) is a cholesterol pill that had $10.7 billion in sales in 2010 before losing patent protection last year.

“We are pleased with the panel’s approval recommendation in support of the safety and efficacy of Qnexa,” said Peter Tam, President of VIVUS. “We look forward to working with the FDA as they complete their evaluation. Obesity is a serious medical condition, and we are committed to making Qnexa available and providing physicians with a new medical treatment option in their battle with this public health epidemic.”

Qnexa “has the highest efficacy in terms of weight loss,” compared with other obesity drugs, said Sanjay Kaul, a professor in the David Geffen School of Medicine at UCLA Cedar Sinai Medical Center and a panel member, during yesterday’s meeting. “That shifts the balance in terms of requiring a post-approval study rather than a pre-approval study.”

Vivus may be a more attractive target for a partnership and acquisition, wrote Steve Yoo, an analyst for Leerink Swann in New York, in a note to investors. Vivus has been looking to sell the rights to its erectile dysfunction drug Avanafil, and “it would not be too much of a stretch to convert those discussions into a more wide-ranging discussion,” he wrote.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.