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Editorial Suggests Possible Pre-Approval CV Testing For VIVUS' (VVUS) Qnexa, Others - Analyst

March 6, 2012 8:54 AM EST Send to a Friend
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Analysts at Jefferies said an editorial published in major cardiology journal, Circulation, is incrementally negative for VIVUS, Inc. (Nasdaq: VVUS) and neutral for Arena Pharmaceuticals, Inc. (Nasdaq: ARNA).

The editorial by three prominent cardiologists who have participated in recent FDA advisory committee meetings for obesity drugs advocates the idea of pre-approval CV safety testing for obesity drugs, particularly for drugs like Vivus' Qnexa, the firm notes.

This would be disappointing for VIVUS investors, which have been buying the stock hand-over-fist since an FDA panel backed Qnexa for obesity on February 22nd by a 20-2 vote.

The editorial states: "If preclinical and early clinical evidence indicates a concern that the drug may increase cardiovascular risk (as would be the case for sibutramine, phentermine-topiramate, and the naltrexone-bupropion combinations), then exposure to the drug product would need to be sufficient to rule out specific cardiovascular safety concerns."

Jefferies notes the editorial does not opine on the design or hurdle for the pre-approval CV safety study but instead advocates that this should be negotiated on a case-by-case basis with the FDA based on feasibility and whether additional clinical benefits beyond weight loss have been observed.

This as a incremental negative for VIVUS headed into the FDA panel on March 28-29 to discuss CV safety testing for obesity drugs and the FDA decision on Qnexa on April 17, the analyst said.

"It suggests that prominent cardiologists remain uncomfortable with the risk of a net unfavorable CV profile with certain obesity drugs like Qnexa and would like to see pre-approval CV safety studies conducted. This suggests that the debate at the March panel may be more contentious than we had previously expected. Furthermore, the editorial closes by thanking Eric Colman, the deputy director of the endocrine division of the FDA, for his “careful review” of the manuscript, suggesting at the very least that the FDA is aware of how some of its key cardiology advisors feel on the question."

The firm said the recent rise in VVUS' share price does not reflect the potential risk of the FDA requesting pre-approval CV safety studies. On the other hand, two of the three authors participated in the Qnexa panel and both voted in favor of approval.

On Arena Pharmaceuticals' lorcaserin for obesity, the editorial notes that CV safety was not a major concern with lorcaserin, and suggests that the "cardiovascular safety requirements for approval could be less."

Jefferies said while it is unclear what this means, it is an incremental positive for ARNA. However, the major side effect concern with lorcaserin was the finding of rat mammary tumors. This will likely be more tied to approval prospects, the firm notes.

Shares of VVUS are down 6 percent in pre-open trading, while ARNA is down 2 percent.




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Comments

VIVUS
Gary L on 2012-03-15 09:48:32
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" a concern that the drug may increase cardiovascular risk ?" I thought thst's what Obesity does anyway???

VVUS
Tiantong Qin on 2012-03-06 19:40:06
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Tim Masters, which contacts do you base your opinion on? I am long VVUS $35 April options, and it would be nice for more solid confirmation. Thanks.

VIVUS
Tim Masters on 2012-03-06 12:50:19
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My 34 years of biotech/pharma career experience w/ multitudes of biotech contacts around the country, including at Vivus, tell me this editorial brings up a valid issue, but Qnexa's benefits FAR outweigh the risks, and a post approval CV trial will be part of the approval. I am told that Qnexa will be approved before 4/17. And that there are 2 major pharm companies that have already tendered buy-out offers regardless of the pre or post CV approval parameters. Both are LARGE companies with field sales forces that have multiple "teams" covering the primary care physician network, not only in the U.S. but world wide. Both are located on the East coast.
Do not be surprised to see an early approval date AND a buy-out offer in the short term. Vivus does not have the resources and sales infra-structure to reap the full potential of Qnexa's astronomical market potential. It will become the largest pharmaceutical product to ever be sold. Buy out will be at least $50.


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