Editor’s Note: The original article incorrectly stated Schedule IV drugs are the second-most-restrictive. This version has been corrected and Motley Fool apologizes for the oversight.
The obesity drug space is becoming increasingly complex and hard to predict. After months of waiting patiently, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) finally got a DEA schedule for its star drug Belviq in May, which could clear up the primary obstacle to Belviq’s availability for sale in the United States. Investors are now wondering when, exactly, Belviq might launch, and what impact its debut could have on major obesity players’ valuations.
Belviq will become the second obesity bet to be launched in the market within a year. VIVUS, Inc. (NASDAQ:VVUS)’s Qsymia is already available through mail order and specialty pharmacies. The only key player still waiting for an FDA approval is Orexigen Therapeutics, Inc. (NASDAQ:OREX) with its candidate Contrave.
After approval, the FDA asked for a DEA review to assess Belviq’s abuse potential. This review took much longer than anticipated, delaying the drug’s launch. According to the DEA, the primary ingredient of Belviq, lorcaserin, can have a hallucinogenic effect if users take dosages higher than the ones needed for weight loss.
The Drug Enforcement Administration has finally given Belviq a Schedule IV classification — its second-least-restrictive, on a scale from one to five. Still, this classification is positive news for Arena investors, who greeted the news by driving Arena’s shares 8% higher.
A schedule IV classification marks Belviq as having a low potential for abuse, which will ensure its availability in local pharmacies. A primary reason behind Qsymia’s poor initial sales was its restriction to mail-order pharmacies only.
Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) will be able to start marketing the drug sometime around June 8, since the ruling takes effect 30 days after its publication. Compared to its competitor VIVUS, Inc. (NASDAQ:VVUS), Arena has taken a less risky approach to the launch of Belviq. While VIVUS, Inc. (NASDAQ:VVUS) is flying solo for the launch of Qsymia, Arena is partnering with Tokyo-based Eisai for Belviq’s commercialization in the United States.
Despite a favorable schedule, Belviq will still have some restrictions on its storage and distribution. Any Belviq prescription cannot be filled more than five times before being renewed by a doctor, and all prescriptions automatically expire after six months.