2012 is so far the best year for the Biotechnology and Drugs industry. So many stocks surged in the last three months based on clinical trial results, U.S. Food and Drug Administration (FDA) approval, FDA Advisory Committee's recommendation, European commission approval, recommendation from independent committees, partnership with big pharmaceuticals, acquisitions and so on. Below is the list of three biotech stocks that are waiting for drug approval for their anti-obesity drug. Any positive news related to these companies will move the share price towards north.
Biotech stocks are high risk-reward stocks and hence considerable analysis is required before trading. Use this list as a potential starting point for your analysis.
Arena Pharmaceuticals, Inc (ARNA): Drug Name - Lorcaserin
Arena is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors, an important class of validated drug targets, in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases.
On March 26, 2012, Arena Pharmaceuticals announced that the European Medicines Agency (EMA) has accepted the filing of a Marketing Authorization Application (MAA) for lorcaserin, an investigational drug candidate intended for weight control, including weight loss and maintenance of weight loss, in patients who are obese (BMI > 30) or patients who are overweight (BMI > 27) and have at least one weight-related co-morbid condition. The acceptance of the MAA filing begins the EMA's review process.
Jack Lief, Arena's President and Chief Executive Officer said
Substantial evidence shows that being overweight or obese can have dire human health consequences coupled with tremendous economic burden. With applications under review for approval in both the United States and European Union, lorcaserin has the potential to provide a new treatment for physicians to help patients lose weight and improve their overall cardiometabolic health.
Craig M. Audet, Arena's Vice President of Global Regulatory Affairs said
We are working diligently with Eisai Inc. to prepare for the FDA advisory committee meeting in May. We look forward to lorcaserin's PDUFA date in June as well as reporting on developments related to the MAA throughout the year.
ARNA has a market cap of $554.80 million and currently trading around $3.08 with a 52 week range of $1.21 to $3.47.
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Orexigen Therapeutics, Inc (OREX): Drug Name - Contrave
Orexigen Therapeutics, Inc. is a biopharmaceutical company focused on the treatment of obesity. The Company's lead product candidate is Contrave®, which has completed Phase 3 clinical trials and for which a New Drug Application has been submitted and reviewed by the FDA. The Company has also reached agreement with the FDA on a Special Protocol Assessment for the Contrave cardiovascular outcomes trial. The Company's other product candidate, Empatic™, has completed Phase 2 clinical trials.
On February 6, 2012, Orexigen announced that it has reached agreement with the U.S. Food and Drug Administration (FDA) on a Special Protocol Assessment (SPA) for the Contrave outcomes trial. On January 31, 2011, the Company received a Complete Response Letter to its New Drug Application (NDA) noting a single approval deficiency related to cardiovascular safety, requiring Orexigen to conduct a randomized, double-blind, placebo-controlled cardiovascular outcomes trial prior to approval. The objective of the trial is to demonstrate that Contrave does not unacceptably increase the risk of major adverse cardiovascular events (MACE). The Company plans to initiate the Contrave outcomes trial late in the second quarter of 2012.
On March 8, 2012, Michael Narachi, president and CEO of Orexigen said
We believe the rapid progress we made with DMEP on the detailed protocol is further indication of the alignment we have reached within the FDA on the requirements for resubmission of the Contrave NDA.
OREX has a market cap of $277.74 million and currently trading around $4.10 with a 52 week range of $1.22 to $5.14.
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VIVUS Inc (VVUS): Drug Name - Qnexa
VIVUS is a biopharmaceutical company developing therapies to address obesity, sleep apnea, diabetes and male sexual health. The company's lead investigational product in clinical development, Qnexa, has completed phase 3 clinical trials for the treatment of obesity and is currently being considered for approval by US and EU regulators.
VIVUS received a Complete Response Letter, or CRL, to the initial Qnexa NDA on October 28, 2010. VIVUS resubmitted the Qnexa NDA in October 2011, with an FDA action date of April 17, 2012. Qnexa is also in phase 2 clinical development for the treatment of type 2 diabetes and obstructive sleep apnea. In the area of sexual health, VIVUS has submitted an NDA for avanafil, a PDE5 inhibitor being studied for the treatment of erectile dysfunction, with an FDA action date of April 29, 2012.
On February 22, 2012, VIVUS announced that the U.S. Food and Drug Administration Endocrinologic and Metabolic Drugs Advisory Committee recommended Qnexa be granted marketing approval by the FDA for the treatment of obesity in adults. The Committee voted 20 to 2, on the recommendation for an approval based on a favorable benefit-risk profile.
Peter Tam, President of VIVUS said
We are pleased with the panel's approval recommendation in support of the safety and efficacy of Qnexa. We look forward to working with the FDA as they complete their evaluation. Obesity is a serious medical condition, and we are committed to making Qnexa available and providing physicians with a new medical treatment option in their battle with this public health epidemic.
VVUS has a market cap of $1.99 billion and currently trading around $22.36 with a 52 week range of $6.13 to $25.14.
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Summary
Among these three drugs, I believe that FDA likely to approve VIVUS Qnexa based on overwhelming support from FDA Advisory Committee. Once this drug is approved, share price is expect to set new 52-week high, preferably above $30 since there is a huge sales potential on anti-obesity drug in the market. Other two drugs also has huge potential and these shares are likely to surge in the upcoming months based on positive news.
Disclosure: I am long VVUS and I may initiate short or long position in ARNA, OREX over the next 72 hours.
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