The biotech sector is among the top sector gainers on Wednesday with hefty gains coming from VIVUS, Inc.(NASDAQ:VVUS), which rose to almost 15-year high, after the FDA issued green signal to the company’s weight-loss drug Qsymia. SPDR S&P Biotech (ETF)(NYSEARCA:XBI) is trading higher by 0.48% to $93.57.
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Late Tuesday, the FDA issued positive result on VIVUS’ weight-loss drug Qsymia, which is the second consecutive approval for weight-loss drug in the less than a month followed by Arena’s Belviq. There are strong expectations from these drugs considering the increased number of obesity with market for prescription weight loss pharmacotherapy is targeted to be at $5 billion by 2015. However, as per analyst at Cowen, Qsymia has the brightest future considering it carries significantly better efficacy. A survey from 5 analysts by Bloomberg resulted that Qsymia should be able to generate $1.2 billion of revenue by 2016.
Although it would be pre mature to reach conclusion about which drug is more efficient and which one would generate more revenue, but investors have started recapitulating these stocks after recent rally. Several analysts are recommending to make buy call on the stock on any correction to the extent of 15-20%. One thing is sure that both – ARNA and VVUS may find strong support at lower after getting approval from the FDA.
Which Stock Should Investors Hold – ARNA or VVUS? Find Out Here
Shares of VVUS gapped up this morning and once it was up as much as 34.30% to reach near 15-year high of $30.47. Within few minutes, the stock witnessed some profit booking as the stock was recently up 13.11% to $29.92. On the other hand shares of ARNA plunged 8.50% to $10.13 as the company’s approved drug’s sale may be impacted after Qsymia’s approval. Shares of ARNA have risen 368% in the past three months.
Here is the comparative stock chart of both – ARNA and VVUS