The Obesity Drug Opportunity Remains

Memory is as fleeting in the marketplace as are the FDA's policies. So, when it comes to considering the potential for developing drugs in the treatment of obesity, it should not be a surprise that the obesity market rises and falls in synchrony with the whims of the FDA.

In mid 2010, the thrust was on for obesity drug manufacturers.  Rising prevalence, a heightened sensitivity that obesity is a lynchpin for a litany of healthcare costs and an implicit recognition that a drug will always be less invasive than a gastric bypass were the forces collectively responsible for obesity drug development.  Then, from that black box that drives FDA policy came a conclusion a la fen-phen that obesity drugs are inherently dangerous.  Hence, by early 2011, Motley Fool reports:

Obesity drugs with safety issues are as common as celebrities getting fired for saying (or tweeting) something stupid. The Food and Drug Administration wants a cardiovascular safety trial before it'll approve Orexigen's (Nasdaq: OREX  ) Contrave. Arena Pharmaceuticals' (Nasdaq: ARNA  ) lorcaserin has potential cancer issues. And VIVUS (Nasdaq: VVUS  ) is dealing with the potential for its combination drug, Qnexa, to cause cleft lip in babies whose mothers take the drug.

They, without so much as a mea culpa, in September 2011, the FDA turns around and relaxes its demands for safety data.  Obesity drugs now have a seemingly shorter path to approval than it seemed a scant month ago. Stocks of Arena Pharmaceuticals, Orexigen and Vivus are back on the rise (not where they were, mid-2010) but headed back in that direction.

Below is the global market opportunity for obesity drugs that remains unchanged as a result of the FDA turnaround.

Source: "Products, Technologies and Markets Worldwide for the Clinical Management of Obesity, 2011-2019". MedMarket Diligence, LLC; Report #S835.

One cannot say that an opportunity exists irrespective of the stance of the FDA, at least not anyone who witnessed, as Motlely Fool called FDA bullying.  In the U.S., regardless of the latent demand or the amount of efficacy sans safety data, the FDA is a gatekeeper.  Even without the obesity drug barricade that the FDA erected, then has seemingly started tearing down, the capricious, unpredictable and, most of all, drawn-out regulatory approval process has been driving manufacturers elsewhere — the EU, even though it is far more Europe than it is Union, is still a well developed western market, and even South America, with its proximity to U.S. distribution systems, has become very attractive.

Demand for drug treatments for obesity remains high — in some ways it may be even higher than had the FDA not become such a barrier. In a free market economy, even as flawed as that model may seem in today's debt-riddled, recessionary world, demand remains a driver that seems to have much more staying power than anyone previously considered.



Posted via email from medmarket's posterous

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