Alright, so today we finally get the FDA’s official review of Vivus’ lead product Qnexa. The stock is up on the release of the coveted FDA Briefing Documents which shine light on the FDA reviewer’s stance. However, I should point out that the drug still has to go through an Advisory Panel hearing, which I will give my odds on in a moment. But first, I would like to take a minute to discuss why the stock is soaring so high today.
The FDA briefing documents usually are the moment of truth for most small cap pharma companies, they can either make or break a company’s stock price in a matter of moments. Today’s release was viewed positively by the market because there were no “ADDITIONAL” concerns raised by the FDA reviewers that weren’t already priced in the stock. The wording in the documents was also concise and outlined how well run the trials were and how extensive the data provided by Vivus was. There were however concerns raised by the FDA in these documents, that I think investors have definitely priced into the stock which is fair and appropriate given the arbitrary nature of advisory panels. So let me go through what my odds for approval are. Please open the briefing document (here) to follow along.
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Nice analysis although from the tenor of the article I was expecting a higher percentage on approval. 60/40 sounds like a coin flip give or take. What happens the the day of the meeting? Does the meeting go all day? Do they have a conclusion that day (Thursday)? Do these things ever get resolved during market hours?
Very complete and objective analysis. Even though I agree with most of your analysis, I’d give 40-60. Even if approved, it would be with very restricted REMS.
I don’t agree with this comment in your article regarding CNS:
” I wouldn’t want to be sitting in their shoes, because if they are forced to decide against Qnexa it might lead to some serious questions from patients already taking topiramate for migraines. Some that may crop up is: Why is it approved for headaches but not obese people when obesity is a much more serious and life threatening problem? If it were me at the FDA I woudn’t be able to answer that without lying through my teeth.”
There is big difference between migraines and obesity. For migraines, it is episodal use for short period of time; for obesity, it is continual use for long period of time. The safety profile requirement for these two different usages are different. Thus if losing weight were to happen in short period of time by taking Qnexa, it would be approved with current safety profile. However, to have to take for years make the safety profile with too many questions.
“they simply monitor the patients serum bicarbonate levels”
“Simply” is in the eye of the beholder. If Qnexa is approved, do you think the average primary care physician is going to prescribe it knowing all of the monitoring/extra lab work he will have to do? Or will the drug be relegated to specialized weight loss clinics.
“The clinical significance of the increases in heart rate is unknown (page 6/248).”
I agree – this statement in the briefing document stuck out like a sore thumb to me.
Sanford at 3:05 pm
It really is “Simple”. Compare this to statins (Crestor, Zocor, Pravachol, etc.) used to lower lipid (cholesterol) levels. Responsible physicians who prescribe statins will require those patients to have their blood tested for liver function every 3 months. I’ve been taking statins for 5 years and have blood drawn every 3 months. There are other serious side effects of statins as well – side effects that could be eliminated in many who are now obese by not needing to take statins due to significant weight loss.
Admin,
How would you handicap the voting panel members? The panel appears to be skewed towards those on the weight loss frontier who would likely vote yes. Would you automatically assume a no vote from the cardiologists and the neurological physicians? Your thoughts?
I think we need to look at this as am overall market (n #). Migraine is a different beast with debilitating effects, so the CNS AEs are fine. With obesity being a pseudo-epidemic, the unknown cardio and CNS are going to really be a no go in my mind. If they are putting Avandia and even the GLP inhibitors (Byetta likes) through the ringers, I do not see Qnexa getting through until the cardio is better understood. That is why ARNA did not put it with their drug (yet)!
I have been watching the weight loss drugs with great interest leading up to the VVUS decision this week. I found a good analysis on OREX yesterday before all the price increases. It is posted at http://www.stocktipweekly.com with information about the 3 companies looking for FDA approval and why they think OREX will be the big winner.
Thursday we will know the FDA’s advisory panel’s thoughts. Usually the FDA reviewers follow the panels recommendations, but sometimes they differ. Trading will be halted, but we will know for sure what the total vote is around 1 pm.
GC
I totally agree, minus your 40-60 estimate, but I wish I had addressed short term usage for migraines in this analysis. So your comment is very helpful for investors. Nice perspective.
GC
This is not a large issue to me, because they can monitor it for other patients and do. So I discount this heavily for the analysis.
GC
i think 70-30 is more appropriate. i find the increased BP funny given what these people’s baseline BP was before using the drug. morbidly obese tend to have very high BP. based on the chemistry, i dont believe taking high BP meds and Qnexa would be a problem either.
what will be the effect of avandia and the relatively low sample size of qnexa? also, I understood that most of the side effects of topiramate were tolerable after the first few weeks with most applicants.
I approve this diet medicine since I proved to save may many lives and potential benifit for all of us as tax payers
Thanks for your substantial analysis.
Would the panel be less likely to approve given an alternative with less onerous side effects (ARNA’s Locaserin) would be possible to approve at the same time (PDUFA dates within 1 week of each other)?
In my opinion you have overlooked the Metabolic Acidosis issue. I know from personal experience that this is a more serious concern. I spent 12 days in the hospital with MA and received three units of blood. It was related to a side effect of Rapamune (Sirolamus) an immune suppressive drug that I took because of a kidney transplant. Next to the heart rate issue that you have already discussed, this is the biggest issue that could derail Qnexa or at least the high dose from approval.
BTW, You have done an excellent job with this and I will definitely click on some ads for you.