Tuesday, June 29, 2010

Diabesity, Cash in Them Thar Sweet Rolls

Two thirds of Americans are overweight or obese. Consequent to the enthusiasm with which high density food is ingested, there has been an explosion in diabetes. A coined term for both conditions is diabesity. A walk through any mall or public venue is rife with diabestics. And there is money to be made in that sea of foamy lipids.

Three pharmaceutical companies are trying to harvest some of the fat in this epidemic. At present, each has a weight reduction drug, with reasonable potential in their respective pipelines.

Arena Pharmaceuticals (ARNA) Lorcaserin
Orexigen Therapeutics (OREX) Contrave

Lorcaserin is a novel single agent that represents the first in a new class of selective serotonin 2C receptor agonists. This receptor is expressed in the hypothalmus, an area of the brain in control of appetite and metabolism. Stimulation of the receptor alters satiety and eating behavior. The drug has great promise.

Qnexa is a combination of two know drugs. Phentermine (Adipex) and topiramate (Topamax) are the active ingredients. In its clinical trials, Qnexa has been effective in promoting weight reduction. This product has a decent chance of FDA approval.

Contrave is a combination of naltrexone and buproprion. This study, of 505 patients, found that patients lost an average of 5 percent of their body weight over a year on the Orexigen treatment, compared with 1.8 percent weight loss for those on a placebo. While that data wasn't as compelling as many investors hoped for, researchers found an important secondary benefit. About 44 percent of those on the Orexigen treatment reached a healthy threshold of blood sugar control, compared with 26 percent on a placebo. Of the three products, only Contrave promotes a healthy blood sugar while facilitating weight reduction. This feature may make Contrave the most desirable, hence successful, of the three entries.

It is clear that one or two or all of these products will be approved for sale. It is equally clear that the need for a weight reduction "pill" will make any or all of them winners. So, the interested investor will reap part of the imminent profits only if he/she puts some cash at risk. Are you in?

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