NEW YORK (AP) — Share prices of two companies with newly-approved obesity drugs moved in opposite separate directions Wednesday, with Vivus Inc. rising to all-time highs while Arena Pharmaceuticals Inc. slumped.
The Food and Drug Administration approved Vivus' drug Qsymia late Tuesday, and the Mountain View, Calif., company's shares rose $2.45, or 9.3 percent, to $28.91 in afternoon trading after climbing to an all-time high of $31.21 earlier in the day.
Analysts said Qsymia is likely to outsell Arena's drug Belviq, which was approved in late June, because patients who took Qsymia lost more weight in clinical trials.
Both drugs are approved for patients who are overweight or obese and who have at least one medical complication related to their weight. Vivus still has full marketing rights to Qsymia, and it said Tuesday that it plans to start selling the drug iate this year. It remains to be seen if the company will try to market a potential billion-dollar drug on its own or if it will take a bigger company as a partner. Arena and its partner Eisai Co. of Japan plan to launch Belviq in early 2013.
Shares of Arena Pharmaceuticals lost 83 cents, or 7.6 percent, to $10.22. They are down 24 percent from their 52-week high of $13.50 in June.
Cowen & Co. analyst Simos Simeonidis said many patients who want to lose weight will try both drugs at some point. While both drugs were linked to significant side effects, Simeonidis said patients and physicians may find Qsymia's risks more tolerable than those connected to Belviq. Ultimately he thinks Qsymia "will do better."
Simeonidis added that he is taking a cautious view of Vivus shares because he does not think the company will be acquired, and Vivus will face many risks if it launches the drug on its own.
JMP Securities analyst Jason Butler expects annual sales of Qsymia to reach $2 billion in 2017, and said he expects European Union regulators to approve Qsymia in September. He took a more optimistic stance on Vivus shares, saying that the company could be acquired or it could find marketing partners for both Qsymia and its impotence drug Stendra, which received U.S. approval in April.
Shares of Orexigen Therapeutics Inc. logged a smaller gain of 10 cents to $7.24. The company is conducting clinical trials of the obesity drug Contrave and hopes to request FDA approval in 2014.