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What a conundrum for Vivus (NASDAQ:VVUS) and the FDA.

Vivus announced last week what I am sure they wish they could have announced prior to the FDA panel meeeting in July--the 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 with much less threatening side effects than what was presented with the results of a one year study. 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.

But the two year study, which included patients continuing their use of Qnexa for another year, showed no evidence of many of the side effects that had so concerned the FDA panel -- such as patients attempting suicide or reporting suicidal thoughts and hypertension. 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.

So, with this new information coming out of a longer trial, will the FDA just accept the panel's recommendation NOT to approve Qnexa, a decision based on a shorter trial, when the recent trial results show significantly less side effects?

Onexa could be a very helpful drug for many patients. Sure, it is tagged as an "anti-obesity" drug, but there are significant health benefits that go along with losing weight.
In the two year trials. The incidence of new onset of type 2 diabetes was reduced by 54% and 76% (mid- and top-dose, respectively) as compared to placebo. And there were improvements with some patients who had hypertension, another health problem associated with obesity.

Apparently, there is some cause for optimism by some investors. The stock has moved up after the two year study results were announced. And an analyst at Canaccord Genuity upped their recommendation on VVUS from a Hold to a BUY on the possibility that the FDA will be able to assess this new informatio prior to the scheduled date of Oct. 28. or, most likely, postponing the decision until the FDA can include this new findings with their final decision of "Market Approval for Qnexa--Yes or No?"

Disclosure: Long VVUS

Source: Will the FDA Give Vivus More Time Before the Final Judgment on Qnexa?