One big story from the last week was the FDA advisory panel's "No" decision on Qnexa, the drug-combo obesity therapy developed by Vivus. This is the one that's a combination of phentermine and topiramate, both of which have been around for a long time. And clinical trials showed that patients could indeed lose weight on the drug (with the required diet and exercise) - but also raised a lot of questions about safety.
And it's safety that's going to always be a worry with any obesity drug, even once you get past the (rather large) hurdle of showing efficacy. That's what took the Fen-Phen combination off the market, and what torpedoed Acomplia (rimonabant) and the other CB-1 compounds before they'd even been property launched. The FDA panel basically agreed that Qnexa helps with weight loss, but couldn't decide how bad the side effects might be in a wider patient population, and whether they'd be worth it:
But the drug has side effects, both known and theoretical. It may cause birth defects, it may increase suicide risk, it can cause a condition called metabolic acidosis that speeds bone loss, it increases risk of kidney stones, and may have other serious effects.
"It is difficult if not impossible to weigh these issues as the clinical trials went on only for a year, and patients will use this drug for lifetime," (panel chair Kenneth) Burman said. "It is impossible to extrapolate the trial data to the wider population."
That's a problem, all right, and it's not just Vivus that has to worry about it. When the potential number of patients is so large, well, any nasty side effects that are out there will show up eventually. How do you balance all these factors? Is it possible at all? As that WebMD article correctly points out, a new obesity drug will come on the market with all kinds of labeling about how it's only for people over some nasty BMI number, the morbidly obese, people with other life-threatening complications, and so on. But that's not how it's going to be prescribed. Not after a little while. Not with all the pent-up demand for an obesity drug.
Although that's probably the worst situation, this problem isn't confined to obesity therapies - any other drug that requires long-term dosing has this hanging over it (think diabetes, for one prominent example). That brings up the question that anyone looking over clinical trial data inevitably has to face: how much are the trials telling us about the real world? After all, the only way to be sure about how a drug will perform in millions of people for ten years is to dose millions of people for ten years. No one's going to want to pay for any drugs that have been through that sort of testing, I can tell you, so that puts us right where we are today, making judgment calls based on the best numbers we can get.
The FDA itself still has that call to make on Qnexa, and they could still approve it with all kinds of restrictive labeling and follow-up requirements. What about the other obesity compound coming along, then? A lot of people are watching Arena's lorcaserin (which I wrote about negatively here and followed up on here). Arena's stock seems to have climbed on the bad news for Vivus, but I have to say that I think that's fairly stupid. Lorcaserin may well show a friendlier side-effect profile than Qnexa, but if the FDA is going to play this tight, they could just let no one through at all - or send everyone back to the clinic for bankrupting.
As the first 5-HT2C compound to make it through, lorcaserin still worries me. A lot of people have tried that area out and failed, for one thing. And being first-to-market with a new CNS mechanism, in an area where huge masses of people are waiting to try out your drug. . .well, I don't see how you can not be nervous. I said the same thing about rimonabant, for the same reasons, and I haven't changed my opinion.
Since I got a lot of mail the last time I wrote about Arena, I should mention again that I have no position in the stock - or in any of the other companies in this space. But I could change my mind about that. If Arena runs up in advance of their FDA advisory panel in the absence of any new information, I'd consider going short (with money I could afford to lose). If I do that, I'll say so immediately.
College chemistry, 1983
The 2002 Model
After 10 years of blogging. . .
1. Ty on July 23, 2010 9:07 AM writes...
It's not very Derekish to make a judge/arguement based on a personal bias and fear rather than on scientific knowledge/data.
Permalink to Comment2. Ex UK-Pharma on July 23, 2010 9:47 AM writes...
Ah, 5HT2C and obesity. That brings back a few memories from my time in the UK pharma industry (I got out some 5 years ago). I won't mention where I was, but I do remember that "The 5HT2C project" was going to make enough money for our (small-to-medium) pharma company to keep trucking until the other thing in the pipeline went supernova.
I recall there being much surprise that the Big Pharma partner laid the whole thing to rest after a Phase 1 trial.
Permalink to Comment3. Petros on July 23, 2010 9:50 AM writes...
Derek
I can't see why you are so negative on Lorcaserin . It targets the best validated mechanism (as shown by fen-phen), but offers much better target selectivity. The publicly available data suggests that CV side effects aren't a major issue, although the FDA may still seek further reassurance
Permalink to Comment4. emjeff on July 23, 2010 10:17 AM writes...
Since food intake is essential to survival, all organisms are going to resist monkeying with any aspect of eating. In that respect, it is much like immune-modulatiing drugs; there are many, many redundant pathways, and you should not expect to shut these down without causing serious problems.
We may have to accept the fact that the "treatment" of obesity (assuming for the moment that it is an actual disease and not a by-product of an affluent society) is not amenable to pharmacologic intervention.
Permalink to Comment5. bbooooooya on July 23, 2010 10:48 AM writes...
The loca panel will be interesting. The drug satisfies one of the FDA's guidelines for efficacy (though efficacy is really nothing to write home about), and also appears to have a benign safety profile. That said, the low ($50 mil) upfront they got is not a strong indication of confidence from Eisai.
Reality is, obesity is a serious health problem in the US, moral dilemmas aside, and something physicians have to deal with. I'm pretty sure "a 5 mile run 5X/week" will not fit in a pill bottle.
This is not a stock I'd want to play without a good hedge.
Permalink to Comment6. Carmen on July 23, 2010 11:31 AM writes...
You have to figure the temptation for docs to prescribe a lorca-phen combination is going to be there. And to my knowledge, nobody's tested the combo yet.
Permalink to Comment7. Jumbo on July 23, 2010 11:32 AM writes...
I have to agree with Ty that it is odd for Derek to make a blanket statement about concern regarding the mechanism without supporting the reason for his concern. Food intake is controlled by multiple overlapping pathways, and the serotonin system has its own redundancies (hence all the multiple serotonin receptors). No clinical trial can properly test for all safety aspects, but what exactly is the concern here? Arena has done what it can to address the CV concerns, probably setting some sort of pharma record for patient hours on Holter monitors! As for citing the failures of other drugs, since when is that an automatic indictment of a mechanistic target. All sorts of factors influence success of a target and in the serotonin area, selectivity certainly is an enormous bugaboo (not to mention borderline acceptable PK, formulation issues, and all the rest).
As for the talk about pathway redundancy, the only other point I would make is that indisputably there are pharmacologic agents that nevertheless cause weight loss. Not in all people, not always at the same magnitude. Lorcaserin will not be a panacea, but obesity is no longer a US-only dilemma and clearly adding to our pharmacological armamentarium is a legitimate need.
Permalink to Comment8. Mark on July 23, 2010 2:03 PM writes...
I disagree with comment #4. I've heard Derek make the same argument: "Food is essential for survival, so appetite is not an easy pathway to shutdown."
Well I would argue sexual reproduction (both libido and gametogensis) is pretty important for survival (of the species), but you can shut that down easily. Same could be said for breathing, blood pressure, blood-sugar level, electrolyte concentration, etc.
I would argue it's the complexity of the CNS that makes obesity such a difficult target. No different than Alzheimer's or schizophrenia.
Mark
Permalink to Comment9. TTBM on July 23, 2010 5:49 PM writes...
The safety of ARNA's Lorcaserin is rock-solid as proven in clinical trials with a total of 7000 subjects over 2 yrs--twice the figures called for by FDA guidelines for both counts. ARNA's partner Eisai has carried out due diligence more thoroughly than any analyst before investing its money into ARNA.
As to Qnexa of VVUS, I wouldn't touch it as a patient, wouldn't prescribe as a doctor, and wouldn't be interested in it as an investor. Furthermore, why would any pharma firm partner with VVUS when its drug is just a combo of existing stuff?
More info:
Permalink to Commenthttp://seekingalpha.com/instablog/523862-kllj-investments/83459-arena-s-potential-is-still-a-well-kept-secret
10. John on July 23, 2010 6:25 PM writes...
I agree with poster #1 Ty "It's not very Derekish or PhD like to make a judgement/argument based on a personal bias and fear rather than on scientific knowledge/data."
If you based your judgement/argument out of fear, I think you should short the hell out of the stock.
Good luck with your short.
John, Fake PhD
Permalink to Comment11. Anonymous on July 24, 2010 12:06 AM writes...
I guess I have to make myself clear. In no way I meant to attack Derek on this. I fully understand where he's coming from. Once upon a time most if not all big pharmas jumped in the race for a selective 5HT2C agonist and one by one they dropped out. I am pretty sure they must have seen something bad with their candidates, in animal, and that's usually why they stop a program before clinical development. My guess is that Derek was a close witness of such a demise, if not directly involved in it and he must know some bad signs that rest of us don't. I myself have briefly worked on a different CNS target for obesity in the past and boy it was a mess.
However, I came to believe that such 'overscience' is what keeps big pharmas from being productive in innovation. That's why small companies as a whole tend to generate more innovative medicines. Big pharmas can pick and choose what looks immaculate moving forward while small shops just have to stick with what they have. The end of the day, with all the never-reliable translation between science and medicine, it's the clinical data that has the final say. History has proven that being overly defensive (conservative) does not make you safer.
I do have a small stake at Arena. I bought a few thousand shares over the past year because I believed safety would have to come first for an obesity drug, much more so than for any other indications. Lorc's safety profile looks to me almost spotless despite the unusually thorough interrogation on the heart due to the Fen fiasco. Plus, as a drug hunter, I side myself with the innovators and wanted see more first in class drugs like Lorc succeed. In fact, I despise 'business drugs' like Qnexa or Contrave and I would never invest in the companies that play tricks to chase easy money, no matter how obviously profitable it might look (not that Vivus did). It actually surprised me that the Qnexa vote was rather close. I expected hell no. Conversely, I think it goes to tell you how much a new obesity medicine is wanted by physicians.
Lastly, I also despise shorting stocks. I think it symbolizes everything wrong with the modern capitalism.
Permalink to Comment12. Ty on July 24, 2010 12:08 AM writes...
um... well... #11 was me.
Permalink to Comment13. Chris on July 24, 2010 10:44 AM writes...
What I like about Lorcaserin is the discontinue rates compared to the others, as well as the only side effect greater than 5% over the placebo was headache. http://www.lorcaserindietpill.com/
Permalink to Comment14. bbooooooya on July 24, 2010 10:52 AM writes...
"I also despise shorting stocks. I think it symbolizes everything wrong with the modern capitalism."
Shorting stocks is actually a shining example proving the benefit of capitalism: it affords more efficient allocation of capital to truly worthy products. A big problem in biotech is the shameless promotion companies engage in: the shorts are they to say "you've got no clothes on", and hopefully help people avoid loses by investing in crap companies. Further, a good way to make money is to take profits from shorting crap companies and investing in legitimate companies. This is how capitalism should work.
There is a common misconception that shorts somehow "destroy" legitimate companies (looking at you Biovail: how'd it taste admitting your suit against Bof A was without merit?). This is not true. I challenge anyone to find an example of a company pursuing good science that was subject to massive shorting. The example I have is IMCL, but for every IMVL there are hundreds of AVNRs, THLDs, VIONs, HEPHs, NRMX', DSCOs, RPRX',
Shorting makes markets work better, which benefits everyone (except scumbag biotech executives whose sole purpose is to keep there $500k+ salaries....)
Permalink to Comment15. adam feuerstein on July 24, 2010 6:19 PM writes...
I swear, No. 14 isn't me, but I agree with him 100%.
Permalink to Comment16. Eric on July 25, 2010 1:25 PM writes...
#11: Amen regarding your comment about Vivus and their 'business' drug. Poor scientific approach in the name of making a buck. They are leeches, as illustrated further by their attempt to patent lorcaserin+phentermine combination treatment. A good business move perhaps, but unethical in my book and the perfect example of what happens when lawyers pose as scientists.
Permalink to Comment17. Anonymous on July 26, 2010 9:05 AM writes...
I wonder how many of the above comments trumpeting Arena and blasting Vivus are coming from the same IP address...
Permalink to Comment18. Hap on July 26, 2010 9:09 AM writes...
Yeah, but IMCL wasn't exactly run by the most honest guy in the world. If that's the best example of shorting being detrimental to a good company, well, your point is probably pretty secure.
Permalink to Comment19. DevicesRUs on July 26, 2010 12:06 PM writes...
#14: I think Mannkind is both doing very neat science but is massively shorted.
Permalink to Comment20. Matt on July 26, 2010 2:24 PM writes...
My favorite part of these articles that end up on Seeking Alpha is the ankle-biting investors who follow in their wake to declare Derek a fool who knows nothing of pharma or a sneaky stock manipulator.
Permalink to Comment21. bbooooooya on July 26, 2010 6:36 PM writes...
"I think Mannkind is both doing very neat science but is massively shorted."
Let's see what FDA says in December. That's a tough road, as PFE and LLY found out.
Permalink to Comment22. Morten G on July 26, 2010 11:53 PM writes...
Is obesity actually detrimental to health?
Permalink to CommentI mean poor diet + low activity levels will make you fat but won't poor diet + low activity = poor health? Lorcaserin decreases appetite but does it improve cardiovascular health or glucose regulation?
I think it will go on the market but an 8 pound weight reduction in fatties aren't going to cut it, especially since the weight comes back after discontinuation of use. It's going to flop. No way it will pull in 3 billion per year.
23. John D. on August 5, 2010 9:03 AM writes...
"Arena's stock seems to have climbed on the bad news for Vivus, but I have to say that I think that's fairly stupid. Lorcaserin may well show a friendlier side-effect profile than Qnexa, but if the FDA is going to play this tight, they could just let no one through at all - or send everyone back to the clinic for bankrupting."
This ridiculous statement is so convoluted and irrational that I don't even know how to respond. Every QNEXA supporter is now running for cover because of their foolish decision in supporting a dangerous drug combination because they saw a "pot of gold" with the high efficacy rates. You and the rest of the QNEXA supporters were blinded by your greed and now want to discredit Lorcaserin's approval chances at every turn.
Go ahead and short the stock fool.
Permalink to Comment24. SJ on August 14, 2010 2:31 AM writes...
I took part in the Lorcaserin study for a year. Lost 57 pounds. Zero side effects. My year ended in May 2009. Still not having any health problems related to having taken the drug. I wouldn't hesitate to take it again.
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