Weighty Issues With Vivus Take a Turn for the Better

| About: Vivus, Inc. (VVUS)

Vivus (NASDAQ:VVUS) announced this week very positive clinical trial results -- results of a two year study monitoring 675 obese or overweight patients using the company's Qnexa drug showing an average weight loss of 11.4 percent (or an average of 25 lbs.) versus the company's previously announced one year study (and a weight loss of 10.4 percent). Patients taking a placebo had weight loss of only 2.5 percent.

The one year trial ended up with the Food and Drug Administration panel in July recommending against approving Qnexa due to concerns of negative side effects such as memory lapses, suicidal thoughts, heart palpitations, and birth defects.

The two year trial involved the continuation of patients using Qnexa in the previous study that lasted 56 weeks, and continuing to take the capsule daily (either ced seQnexa or a placebo) for an additional 52 weeks. Contrary to the one year trial, the study results showed no evidence of patients attempting suicide or reporting suicidal thoughts, and effects on the heart rate were very low. The longer trial showed that problems like negative cognitive effects and heart problems, sleep disorders, and depression were less common in the second year of testing. VVUS's clinical trials have involved a total of 4,323 patients with the company noting that a very low 0.59 percent of them experienrious cardiovascular and neurovascular side effects, consistent with the rate reported with a placebo.

Qnexa use low doses of the generic stimulant, phentermine, and the epilepsy drug topiramate, (known as Topamax). The delivery system is a time release capsule which releases the two drugs timed to minimize side effects.

Although the layman may see an anti-obesity drug as having a mostly "cosmetic" reason for use, the incidence of new onset of type 2 diabetes was reduced by 54% and 76% (mid- and top-dose, respectively) as compared to placebo. That is a SIGNIFICANT reduction in the onset of diabetes. Weight loss with QNEXA in this longer trial was also associated with statistically significant improvements in other weight-related complications such as hypertension.

As with most new drugs, there were some negative side effects such as dry mouth, a change in the sense of taste, insomnia tingling and constipation. But not too alarming to the panel in July.

The hope here is that the panel which voted against recommending the drug's approval based on the one year trial data due to safety concerns such as pregnancy risk, psychiatric and cardiovascular side effects would have voted differently if presented the two year data.

Judging by the 15% increase in the stock price since the two year trial results were announced on September 21 and an analyst upgrade at Canaccord Genuity from a Hold to a Buy, there are some investors willing to take the risk before the scheduled decision date of Oct. 28. by the FDA. Coupled with a short interest of 14.1 Million shares out of a total share count of 81.1 million outstanding, the risk/reward equation for some investors is clearly attractive.

Disclosure: No position

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