Shares of VIVUS, Inc.(NASDAQ:VVUS) dropped another 9% at $19.07 after falling 5% in Friday’s session, after it announced that its obesity drug, the first diet pill released in US in more than 10 years, might not be approved by a European regulatory committee. There have been safety issues with obesity drugs before like the infamous "fen-phen" diet-drug combo, which is why regulatory committees have become more stringent.
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Cowen and Co analyst Simos Simeonidis states that an approval in the future by the European Union is unlikely due to the numerous issues that have been raised by them, such as the lack of comfort with phentermine in
Europe. Vivus's Qsiva has
phentermine, which suppresses the appetite, along with the anti-seizure drug
topiramate. An obesity pill was released in Europe
called Acomplia, but was taken off the market due to enhanced suicide risks.
The final decision about Qsiva from the European Medicines Agency's Committee for Medicinal Products for Human Use will be pending till October. If the results are negative, Vivus will re-evaluate their marketing application later and submit it again or opt for a review via an appeal. Simeonidis said that Vivus will be able to eliminate a part of the acquisition premium assigned by some investors.
The U.S. Food and Drug Administration in July had given the green signal to Vivus’s drug with the name Qsymia. Arena Pharmaceuticals’s Belviq was also approved by them and it is the first diet pill to be given the go-ahead in 13 years. Belviq is likely to be released next year, whereas Vivus has unveiled their product in September.