Vivus to Roll Out Key Obesity Drug Data

"This would be the best [weight loss] data in years since fen-phen. ...We think the stock could trade to $8-$9 on good data," Butler wrote. Butler has a market outperform rating on Vivus, which has no banking relationship with Rodman.

The FDA requires 12-month weight-loss studies for approval, so the six-month EQUATE study will not be enough for Vivus to file Qnexa with the regulatory agency. To that end, Vivus is conducting two longer phase III studies, with data expected next year.

Earlier this year, Vivus announced results from a six-month study of Qnexa in patients with type 2 diabetes that resulted in a placebo-adjusted 6.8% weight loss plus a reduction in blood glucose levels compared to placebo.

Along with the EQUATE study results, Vivus is also expected to release data from a six-month extension of the diabetes study. Cannacord's Cutler says this will be the first indication of how Qnexa performs over a 12-month treatment period.

For all the focus on weight loss, the biggest hurdle facing obesity-drug makers like Vivus is safety. In particular, the FDA is keenly focused on detecting any adverse changes in behavior or mood that may be an early signal for an increased risk in suicidal thoughts and behavior (the safety issue that scuttled rimonabant.)

For Qnexa specifically, the safety issues of potential concern, in addition to mood changes, are cognitive impairment and paresthesia, or tingling in the hands and feet.

There is no set timetable for the release of data from the EQUATE or diabetes studies, but Vivus is widely expected to announce results prior to the company's analyst meeting on Dec. 12.