VVUS - FDA advisory panel in 10 days!!!

The clock is ticking. The FDA's advisory panel will gather on Thursday July 15 to offer independent expert opinions on Vivus' (VVUS) investigational obesity drug, Qnexa. As discussed in my previous post, subjects taking Qnexa achieved an average weight loss of 14.7% (37 lbs) in two major phase III trials lasting 56 weeks involving 3,750 patients. While concerns about the potential side effects of Qnexa may present a barrier, VVUS is confident that the low doses of the drug combination (Phentermine/topiramate) delivered by Qnexa will drastically minimize possible negative effects previously associated with these two individual drugs by themselves.

Competitors
Qnexa currently has two competitors in late stage development. The first is Lorcaserin from Arena Pharmaceuticals (ARNA) and the second is Contrave from Orexigen (OREX). Patients prescribed Lorcaserin and Contrave in phase III studies lost an average of 5.8% and 7% body weight, respectively.

Panel meeting for Lorcaserin - Sept 16, 2010
PDUFA date for Lorcaserin - Oct. 22, 2010

Panel meeting for Contrave - Dec. 7, 2010
PDUFA date for Contrave - Jan. 31, 2011


FDA's Cutoff
The FDA has two alternate efficacy benchmarks in its most recent draft guidance. A weight-management product can be regarded as effective if after one year of treatment:
1) The proportion of subjects who lose greater than or equal to 5% of baseline body weight in the active-product group is at least 35%, is approximately double the proportion in the placebo-treated group
2) The difference between groups is statistically significant.

Strategy
Data from Qnexa's studies certainly support the advancement of VVUS' diet pills based on the above guidelines. However, it is now up to the physicians to decide whether the benefits outweigh the potential risks of the drug. We will find out about this next week. Given past experiences with FDA's panels, it is quite likely that they will meet ~2 to 3 days ahead of schedule. Since share prices tend to fluctuate dramatically on the panelists' votes, it would be less risky to exit by July 13.