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Shares of Vivus Fall On News of Drug Causing Birth Defects

AP
Thursday, 22 Dec 2011 | 10:21 AM ET

Shares ofVivustumbled more than 16 percent a day after the drug developer released data linking an ingredient in a weight loss treatmentit is developing to an increased risk of birth defects.

The Mountain View, Calif., company said that women who took topiramate, one of the two main ingredients in its drug Qnexa, during the first trimester of pregnancy were about twice as likely to give birth to a child with cleft lip or cleft palate, compared with women who had taken
the drug in the past but not while pregnant.

The data is based on an analysis of more than 15,000 past medical claims and was not taken from a clinical trial of Qnexa. Vivus had agreed to conduct the analysis after the Food and Drug Administration refused to approve Qnexa last year. Vivus said it is working to confirm the medical claims and expects to complete that process in next year's third quarter.

Vivus said in October it had resubmitted its FDA application for Qnexa, which was once touted by many experts as the most promising weight-loss drug in more than a decade.

The development has created some doubts, said Jefferies analyst Thomas Wei.

"These data leave us more cautious for a broad approval covering women of child bearing age," he wrote.

Brean, Murray, Carret & Co. analyst Jonathan Aschoff said the results do not support the drug's approval.

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