On both sides of the Atlantic, investors are itching to know why obesity drugs from
are still in regulatory limbo in the U.S.
For France's Sanofi, it's Acomplia, which is sold in nine countries, primarily European Union nations. It received conditional approval by the Food and Drug Administration
12 months ago, but final action has been delayed until at least late April.
Acomplia is Sanofi's most important pipeline product, and analysts have said it could be worth billions of dollars a year.
For Britain's GlaxoSmithKline, the drug is Alli, an over-the-counter version of
Xenical . Alli lacks the potential profit punch of Acomplia, and analysts say a delay or outright rejection would be less of a setback than would be the case for Acomplia.
Still, GlaxoSmithKline is counting on it to successfully emerge from its R&D labs. Two FDA advisory committees endorsed it 13 months ago, and the agency granted conditional approval in April.
Originally, both companies forecast that their drugs would be available in the second half of 2006, but they've been quiet for some time. Analysts and investors will hope to find out more on Feb. 8 when GlaxoSmithKline releases its quarterly results and on Feb. 13 when Sanofi reports.
Without any guidance from the companies, analysts can only speculate on the reasons for the delays. One potential issue for Acomplia is that clinical trials have shown
a higher rate of depression among patients who take it.
As for Alli, the FDA apparently wants more proof that the drug won't be abused, especially by people who aren't obese. Then there are the side effects. Xenical, on which it's based, has caused various bowel problems. Users of that drug have to take a daily multivitamin supplement because Xenical interferes with the body's absorption of certain vitamins.
Despite their differences, one theme links the drugs. "Regulators still have fen-phen on their minds," says Donny Wong, senior analyst for metabolic disorders at the independent research firm Decision Resources. "And following the withdrawal of Vioxx, the FDA has become even more stringent about safety for drugs used to treat chronic diseases."
Fen-phen is the
diet drug cocktail that included medications from
. The company removed two drugs, Pondimin and Redux, from the market in 1997 and has spent billions of dollars to defend, settle and pay off claims that its drugs caused heart damage.
Vioxx is the arthritis drug that
stopped selling in September 2004 after clinical trials showed it could increased the risk of cardiovascular ailments. Merck is now facing
27,400 U.S. personal injury suits.
Regulators are being pressed to further examine the potential long-term side effects of all drugs, including experimental diet products. "There is a concern that some side effects will not emerge until large numbers of patients have taken the drug for many years," says Wong, in reference to Acomplia.
Depending on whom you ask, regulators are becoming more safety-conscious or more skittish. In any case, greater scrutiny will mean extra costs for drugmakers.
Some researchers say previous testing for obesity medications has been inadequate, because companies focused on weight loss but not necessarily side effects such as heart damage.
"The lack of cardiovascular morbidity and mortality endpoints in obesity drug trials represents a major gap in knowledge," says a January article in the prominent British medical journal
. The article was written by two physicians at the University of Alberta Hospital.
Other potential side effects -- arthritis, sleep difficulties and gastrointestinal problems -- have been ignored in clinical trials, Raj Padwal and Sumit Majumdar say in the article. Assessing side effects is difficult because of the high dropout rates in many clinical trials.
"The track record for safety of antiobesity drugs has been particularly poor, whereas their potential for abuse by nonobese individuals striving to lose weight is high," they say. "Drugs can be toxic, and these toxic effects are often not apparent on initial release."
No drug has produced "consistent long-term weight loss," the researchers add. That means the obesity drug market is wide open. Aside from Xenical, which the FDA approved in 1999, the only prescription weight-loss drug cleared for long-term use in the U.S. is
A handful of generic drugs are allowed for short-term use, but patients can take them for only a few weeks. According to Sagient Research Systems, which tracks biotech and pharmaceutical developments, 34 companies are conducting trials on obesity products.
Decision Resources' Wong says prescription obesity drugs produce only about $400 million in sales in seven big markets, with half coming from the U.S. and the rest from European countries. In the U.S. alone, weight loss is a $30 billion market when you factor in nonprescription drugs, weight-loss programs and surgery.
"A successful drug that is effective and safe has the potential to become a megablockbuster," says Wong. However, there are numerous hurdles, the most daunting of which is insurance coverage. Xenical's poor showing was due in part to insurers' reluctance to pay for it, he says.
The biggest issue today is side effects. For Xenical, it's the gastrointestinal problems. For Meridia, approved in 1997, it's the risk of high blood pressure. The consumer watchdog group Public Citizen has unsuccessfully petitioned the FDA to ban both drugs. It also opposes nonprescription Alli.
Despite the U.S. delays for Acomplia, many analysts still make a bullish case for Sanofi.
"We believe that the market has become increasingly concerned about nonapproval or an FDA request for additional data that could materially delay launch," says Graham Parry of Merrill Lynch, which has an investment banking relationship with the company. "We therefore believe that approval, even with label restrictions, would now be viewed positively."
In a recent report, Parry gave Acomplia a 90% chance of getting cleared. He recently raised his rating to buy from hold, adding that the FDA might require a patient registry or a risk-monitoring program to secure approval.