BOSTON ( TheStreet) --It was a tough day for Vivus ( VVUS) Thursday after an outside panel of experts convened by the U.S. Food and Drug Administration narrowly rejected the company's weight-loss drug Qnexa on concerns about the drug's long-term safety.

The initial advisory panel vote was 9-7 against Qnexa, then 10-6 when one "yes" panelist reversed his vote. During the discussion period following the vote, one of the "no" experts said he could have voted for approval, so however you look at it, the decision was a close one.

If approved, Qnexa would have been the first, new weight loss drug to reach the market in a decade, and with 1 in every 3 Americans overweight or obese, the drug might have been used by millions of people. That put the drug's safety at the forefront of the discussion Thursday. Vivus' approval application included one year's worth of safety data but that was not sufficient enough to satisfy panel members, who cited the potential for cardiovascular and pregnancy/birth defect risks as their top concerns.

Despite the negative vote Thursday, Vivus and Qnexa are not dead. Delayed, yes, but I still believe Qnexa can be approved. Some additional thoughts and comments:

For the sake of accountability, let me say near the top that my prediction of a positive Qnexa panel vote was wrong. I rightly recognized that the Qnexa decision was going to come down to a referendum on the drug's safety, and I said the vote would be close, but I failed to recognize or appreciate how much the lack of long-term safety data would have on the decision. That was a big mistake on my part.

A top FDA official seemed sympathetic to Qnexa in post-panel comments Thursday, expressing surprise over the negative vote. Interesting, but I don't think that helps Vivus gain approval for the drug by the agency's Oct. 28 approval decision date. The FDA has been known to go against panel recommendations before, but that's not going to happen in this case, so a significant delay is all but certain.

Vivus is collecting two-year safety data on Qnexa, which the company said would be ready later this quarter. Clearly, Vivus is going to submit the new safety data to FDA as soon as possible. At best, FDA will take six months to review the new safety data, but conservatively, it's probably a year delay for Qnexa's approval -- the fourth quarter of 2011, perhaps into early 2012.

The high dose of Qnexa seems to cause most of the side effects, which raises the question of whether the FDA could approve the low and middle doses of the drug only. The topic was brought up briefly during Thursday's panel but the FDA seemed to suggest that all three Qnexa were linked together. Moreover, a large majority of the patients enrolled in the Qnexa trials were treated with the high dose only, which means there's not very much patient data on low and middle-dose Qnexa for FDA to evaluate.

Vivus opened for trading Thursday night down 56 percent to $6.86. I expect the stock to be volatile Friday but eventually settle into the mid-to-high single digit range. Not great by any measure considering the stock traded as high as $14 right before the panel, but it could be worse, too.

Arena Pharmaceuticals ( ARNA) looks to be the default winner from Thursday's negative decision on Qnexa, mainly because the company already has two-year safety data on its weight-loss drug lorcaserin that has not (to date) raised any alarm bells. An FDA advisory panel meets Sept. 16 to review lorcaserin, with an FDA approval decision date of Oct. 22.

Patients don't lose much weight with lorcaserin, but that doesn't seem to matter to safety-obsessed regulators or outside experts. Getting a weight-loss drug approved by this FDA is never going to be a sure thing, but right now Arena appears to have the best shot.

Orexigen Therapeutics ( OREX) is probably exhaling deeply, thankful that its weight-loss drug Contrave is last in the review line at FDA right now. Like Qnexa, Contrave is a two-drug combination that was filed for approval based on one year's worth of safety data. But the company has more time on its hands to collect additional safety data given an FDA advisory panel date of Dec. 7 and an approval decision date of Jan. 31, 2011.

Orexigen could use the extra time to compile more data to counteract concerns that Contrave contributes to an increase in blood pressure. Given Thursday's focus on cardiovascular risk tied to obesity drugs, this is the probably the biggest hurdle that Orexigen needs to overcome for Contrave's approval.

My live blog of the Qnexa panel attracted more than 10,000 readers Thursday -- an amazing response. Thank you! Naturally, the coverage brought its share of reader comments and questions. Here's a small sampling of the email I received:

Patrick writes, "I think Vivus could challenge the FDA because of the SPA Special Protocol Assessment.… If the FDA wanted more long-term data, why wasn't that requested as a part of the SPA? Seems a little contradictory to come back with a rejection because Vivus didn't provide enough data, even though FDA designed the trial."

Along the same these, Andy S. writes, "You did a great job and a great service to the investing community with your live blog. Although I was long the stock and am disappointed with the resulting vote, that’s life. My big question is how could the company and the FDA design a trial like this and not adequately address the kinds of safety issues that arose during this panel hearing? It borders on stupidity to conduct trials like this that leave open the kinds of questions and concerns that arose before appearing at a panel. I wonder if in this case the FDA may not make a different decision in October given that the vote was close and the efficacy of Qnexa does not appear to be at issue."

It does seem like Vivus and FDA initially agreed that a single year's of safety data were enough, but clearly, the outside panel disagreed. Special protocol assessments around trial design are not written in stone; these agreements are fungible. I think Vivus does have a case to make that one year of safety data are sufficient, but it's probably not a winning argument at this point.

Kevin R. writes, "Thanks for all the hard work today. Good job. I am long Arena and think we will get the approval because of safety. Once again, good coverage and have a great day."

Mark G. emails, "You did a fantastic job on the blog. The cardiovascular issues and lack of data in the studies, as I mentioned the other day, might have been Vivus' undoing… Next batter -- Arena! -- with the safest set of data."

Mark is right. Qnexa was undone by cardiovascular safety issues, specifically concerns about an increase in heart rate tied to the drug. This despite other data showing Qnexa lowered blood pressure.

The controversy over the GlaxoSmithKline ( GSK) diabetes drug Avandia also played a definite role in Thursday's proceedings. Many of the experts on the Qnexa panel spent the prior two days deliberating the heart safety of Avandia. I think this put panel members in an extra cautious safety mode.

Bob B. writes, "Just to let you know that I really liked your coverage of Qnexa today. I learned a lot and I think you were fair and balanced. For what's its worth, my bet is that $3-4 at the open tomorrow for Vivus is on the low side. I think a school of thought will emerge that problems can be remedied with more data acquisition. So my bet is $6-$7.

Norm F. writes, "Well, it was certainly an interesting day. Are you coming around on the Arena safety advantage now? The Arena trials were far more robust, safety was clearly superior, side effects lower. I just hope two years of cardiovascular data will be enough for the next panel. Arena should certainly be prepared."

Steve writes, "Thanks for the work you put into the Vivus review panel and blogging all day…You really missed the boat. Arena is the one you should have backed all along and now I think you have the data you need to assert its primacy."

Lastly, an email from Eldon W. "Thanks Adam, for giving us a bird’s eye seat for the FDA review panel. It was interesting and fun."

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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