Wednesday, July 14, 2010

Diabesity Drugs on a Roll, Qnexa is a Homer

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 obesity and diabetes. A coined term for both conditions is diabesity. A walk through any mall or public venue is rife with diabestics. Diabesity will be the major health problem in America for the near or even long term future. 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, proprietary name pending


Vivus (VVUS) QNEXA


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 is scheduled a proclamation by the FDA's Endocrinologic and Metabolism Advisory Board tomorrow. In clinical trials, Qnexa works! A favorable statement is expected. It should be noted that the FDA relies HEAVILY on its Panels, a favorable opiunion usually leads to drug approval. With a huge target market, Qnexa is a homerun out of the gate. VVUS has seen a nice gain yesterday, but it still has room to grow. ?$18-20?

With the eager anticipation of Onexa's ascendance, both AANA and OREX have seen sweet pops in value, too. These two could be good plays as well, or perhaps a trifecta approach might be a good hedging strategy. When it's all said and done there will be the "winner" pick among the three contenders, but ultimately there is money to be made with the fatty play.

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. Fatty drug availability coupled with Americans desire to take a "pill" for most everything will create a money tree for those in line to harvest. Are you in? It's not too late to parlay your bet today.

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