Local politicians have seemed to be falling over themselves in order to prove that they are the ones who will take America’s obesity problem seriously and serve as a beacon for the rest of the country. While the restriction of certain food and beverage products has been at the crux of the health campaign, the pharmaceutical industry is getting into the game and offering people a chance to shed pounds by chemical means.
On Wednesday, the Food and Drug Administration announced that they had approved a drug designed to target obesity. This is the first medication of its kind to be approved by the federal agency in thirteen years. Considering that two-thirds of Americans are overweight and one-third are obese it would seem that the market for these products is quite large in the United States.
The race to get obesity-fighting drugs approved has heated up in the past few years, but it was ultimately Arena Pharmaceuticals’ (ARNA) drug, which will go by the retail name Belviq, that won federal approval. It was one three products seeking approval to be sold on the open market, and its recognition from the FDA is sure to be boon to its producer. Other drugs have been held up in recent years because possible side effects that could lead to heart valve problems or cancer risks. However, regulators ultimately decided that the benefits of the pill outweighed the risks. Average test subjects lost five percent of body weight in clinical trials.
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In the ever-growing pharmaceuticals industry, the approval for a drug with this kind of market value is sure to bring in significant revenues to Arena. Markets reacted positively to the news as shares were up over forty-five percent during intraday trading and closed with a near thirty-percent increase in share value.
Competitors of Arena might be soured that their product was not granted approval first, but Wednesday’s news could also be a good omen for them, as the FDA may now be entering an era where they feel comfortable approving these types of drugs if they are effective in helping people reduce weight to such a point that the benefits outweigh any risks.
Listed below are two other companies, along with Arena, that hope to introduce weight loss products to the market.
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1. Arena Pharmaceuticals, Inc. (ARNA, Earnings, Analysts, Financials): Focuses on discovering, developing, and commercializing oral drugs in the therapeutic areas of cardiovascular, central nervous system, inflammatory, and metabolic diseases. Market cap at $1.47B, most recent closing price at $8.08.
2. VIVUS Inc. (VVUS, Earnings, Analysts, Financials): Engages in the development and commercialization of therapeutic products for underserved markets in the United States. Market cap at $2.53B, most recent closing price at $25.33.
3. Orexigen Therapeutics, Inc. (OREX, Earnings, Analysts, Financials): Focuses on the development of pharmaceutical product candidates for the treatment of obesity. Market cap at $261.63M, most recent closing price at $3.86.
(Written by Dan Connelly)
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