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Pharma Groups Hope for Diet Drugs Binge

Andrew Jack
Thursday, 27 Dec 2012 | 2:18 AM ET
Peter Dazeley | The Image Bank | Getty Images

As Christmas overeating gives way to under-fulfilled new year diets, the pharmaceutical industry's appetite has been whetted for a fresh surge in business.

After years of caution and setbacks, several drug companies are preparing to capitalize on what they hope will be a surge in sales from prescription medicines linked to the growing global trend of obesity.

"It has been a very challenged category, but there is a feeling we have to do something about obesity with the realization that it is a medical epidemic," says Peter Tam, president of Vivus, a California-based biotechnology company. Last autumn it launched Qsymia, the first weight loss drug to win US regulatory approval in 13 years.

In the coming weeks, Arena, another West Coast biotech, is set to launch its drug Belviq after receiving authorization. A third, Orexigen, is preparing to submit for fresh regulatory approval for its experimental medicine Contrave after previous rejections.

"There has been a very significant and rather sudden shift in the views of the regulator over the past year," says Simos Simeonidis, senior biotech analyst with Cowen. "Companies had been laying off staff and putting products on hold. Now there has been a resurgence and a lot of investor interest."

Weight loss drugs have long been viewed with suspicion by healthcare specialists both because of their limited efficacy and the risks of side effects – factors which continue to haunt the field. Qsymia's weight loss impact is slightly more than 10 percent and Belviq's less than 6 percent – both when tested in ideal conditions with strong medical supervision.

Meanwhile, Wyeth, now part of Pfizer, is still fighting claims of heart valve defects and other problems linked to Fen-Phen, a combination of diet drugs withdrawn in 1997 for which it earmarked reserves of $21 billion to cover settlements. Regulators subsequently pulled Abbott's drug Meridia, and – in Europe – both Servier's Mediator and Sanofi's Acomplia, which was linked to suicidal feelings.

Only one prescription weight loss drug has remained on the market in the US: Roche's Xenical, approved in 1999 and also now sold over-the-counter by GlaxoSmithKline as Alli. It appears relatively safe, but only modestly effective and brings unpleasant side effects including oily stools. That has limited its commercial success and frustrated attempts by GSK to find a buyer.

Mr Tam suggests that fresh interest in diet drugs by US regulators began in 2007 with studies on the significant impact of bariatric surgery in reducing not only obesity but related mortality. In recent months, he says high-level scientific meetings coupled with public discussion led by Michelle Obama, the US first lady, may have proved important in urging a more receptive attitude towards medicines.

For now, larger western pharmaceutical companies remain reluctant, with little in their late-stage pipelines except for Novo Nordisk of Denmark, the specialist diabetes company. It is currently testing expanded use of its injectable treatment Victoza for weight loss.

Japanese companies have proved more active: Eisai partnered with Arena and Takeda with Orexigen. Mr Simeonidis suggests this may reflect that until recently the investments in weight-loss biotech companies were "a free option" given high skepticism and low valuations. "I wouldn't be surprised if we start to see more involvement from big pharma now."

For now, Mr Tam says Vivus is rebuffing alliances. "We have preferred to shake off suitors and do it alone to maintain value for our shareholders." But he foresees the prospect ahead of using direct-to-consumer advertising and a larger scale sales force to market Qsymia to doctors – something likely to require a big pharma partner.

The path will not prove easy. Vivus had to agree a tight monitoring program with US regulators to track each user, notably to avoid the risk of its use by pregnant women, since Qsymia can cause birth defects. The more aggressively any of the new diet pills are marketed, the greater the risks of misuse, failure to ensure the drug is accompanied by diet and exercise and danger of consumer disappointment.

Gary Palmer, chief medical officer in the US for Eisai, which will co-ordinate Belviq's launch for Arena, says: "We are still considering whether to use direct-to-consumer advertising. Our approach will start with specialists. This is about being responsible and educating the physicians."

Concerns linger about safety. Sidney Wolfe, head of the health research group at Public Citizen, a US consumer watchdog that has fought approval of the new drugs, wrote recently: "Obesity is unquestionably a serious public health concern, but that doesn't give the FDA licence to ignore the scientific evidence."

European regulators, stung by their recent bad experiences with Acomplia and Mediator, remain skeptical and have so far not approved the newer drugs. And many health insurers in the US remain cautious about reimbursing a medicine with modest efficacy and only potentially very long-term benefits – leaving consumers to pay out of pocket.

Donny Wong, head of metabolic disorders at Decision Resources, a market research agency, predicts rising obesity will increase demand in the years to come. But he warns: "Expectations are really sky high. Patients are expecting at 55 years old to go back to their ideal weight at 20, with a 15-20 per cent loss that is unachievable. They will very rapidly become disappointed."

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