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Arena Pharmaceuticals, Inc. (ARNA), VIVUS, Inc. (VVUS), Orexigen Therapeutics, Inc. (OREX): Have Drugmakers Found the Panacea for Obesity? (Part I)

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After a gap of several years, there seems to be a candidate in the obesity drug market that could turn out to be a long-term winner. Each drug in the market has its merits and demerits, but there is one with relatively strong market potential, in my opinion. It finally seems like obesity has become a surmountable challenge.

The past record of obesity drugs has not been great. Going by the historical trend, it is clear that for a new drug to succeed, not only does it need to satisfy the basic criteria for efficacy required by the FDA, but it also needs to demonstrate no increase in cardiovascular risks, if not a decrease.

This is because most drugs in the past have been tried out initially based on their efficacy data, but have been abandoned due to cardiovascular or neurological side effects. Overall, it will be important that patients are able to tolerate the drug well and do not experience any serious side effects in the long run.

Which new obesity drug has better chances in the market?

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’ new drug, Belviq (lorcaserin), shows modest weight loss effects compared to Qsymia and Contrave, the two other new major drug candidates. However, it positively impacts factors such as blood pressure, heart rate, lipids, waist circumference, and HbA1c, several of which are mentioned in the draft FDA guidelines for products intended for weight management.

Since Belviq can achieve weight loss benefits along with positive effects on several other health indicators as mentioned, it could have a chance against Qsymia and the formidable generics, phentermine and topiramate, in the market.

To help Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) with marketing Belviq in the U.S., Eisai, a Japanese pharmaceutical company, has entered into an agreement with the company. The deal gives Eisai the exclusive rights to commercialize Belviq in the U.S. Eisai has already paid a fee of $50 million to Arena, and will make up to $160 million in milestone payments in the future, apart from giving a share of 31.5% of Belviq’s revenue.

This deal places Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) in a safe position as it heads out to launch its product in the market. Based on how the sales turn out relative to other drugs, Eisai can plan strategies to further promote the drug, while Arena will be cushioned against great setbacks in the event of failure of the drug in the market.

A recent Decision Resources press release states that several managed care organizations (MCO) pharmacies and medical directors in the United States are not favorable towards weight-loss drugs, and block them from patients’ reach.

As if satisfying efficacy criteria was not enough, hurdles such as this one will make the market viability of the new drugs entering the market seem bleaker. It is being predicted that Novo Nordisk’s Victoza will become the market-share leader in the obesity market. This would most likely happen due to physicians’ experience with prescribing the drug to treat type-2 diabetes, as well as experience with (unapproved) prescribing of the drug for obesity.

Also, matching phentermine’s dominance in the market will be a cumbersome task. Belviq, in my opinion seems most well-positioned to do this, given the fact that patient tolerance of the drug is comparatively better than the others and there are positive effects on factors such as blood pressure and heart rate. Many people who are not open to trying drugs for weight loss are likely to get convinced to use a safe and mild drug as this one for a start.

The challenge for Belviq would then be to show long-term efficacy to ensure it can become competitive with phentermine. Belviq, it seems, has been created for the very purpose of replacing fenfluramine, which was previously prescribed in combination with phentermine, but was later rejected due to its contribution to heart valve defects.

The phentermine-Belviq combination might have some promise in it, because while Belviq is not able to achieve as much of a weight reduction as phentermine, it can perhaps, when used in combination with the latter, bring about some improvements in cardiometabolic factors. I am also curious to find out the long-term weight loss impact of Belviq, because I would like to know whether the improvement in cardiometabolic factors actually increases over time, and whether it aids in greater weight loss over the long run.

Eisai will have to spend a lot of resources in ensuring that physicians and patients are well educated on the benefits of Belviq. Currently, there is no other product in the market that can help achieve cardiometabolic benefits along with weight reduction. Patients’ biggest concern is harming their health while taking drugs to lose weight and Belviq addresses that problem bang on. Now, it is for the marketing personnel to heavily promote this product and educate patients and doctors.

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