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Arena Pharmaceuticals Inc
Merck & Co Inc
Orexigen Therapeutics Inc
Eli Lilly & Co
Obesity drugs are getting a lift after years of languishing even as populations around the globe get heavier. Rather than pharmaceutical giants, it is small companies with an appetite for risk leading the charge.
Plagued with failures and side effects, drug development in obesity slowed to a near halt in the last decade as most large pharmaceutical companies abandoned efforts, leaving smaller biotechnology companies to forge ahead. This year, after 13 years with no new drug approvals, the U.S. Food and Drug Administration cleared two medicines for obesity, kick starting what many hope will be a rejuvenation for the field.
“A few years ago we were in the darker days of obesity where the regulatory environment was uncertain and pharma was doubtful this would ever be a market segment,” Kevin Starr, a partner at Boston-based venture capital firm Third Rock Ventures LLC, said in a telephone interview. “There’s been a sea change at the FDA in their recent approvals.”
Prospects brightened for obesity drug development this year as the FDA signaled it would be more willing to seriously consider drugs as a viable way to treat some forms of obesity, calling it a “major public health concern.” Now the betting is more approvals may follow.
Almost 36 percent of U.S. adults are obese, a condition that can lead to heart disease, Type 2 diabetes and stroke, according to the Centers for Disease Control and Prevention. Medical costs associated with obesity are estimated to have been $147 billion in 2008.
Third Rock Ventures is an early backer of Zafgen Inc., a biotechnology company in mid-stage trials of a therapy to treat obesity. The Food and Drug Administration cleared Belviq, from Arena Pharmaceuticals Inc. (ARNA) and Eisai Co. (4523), in June and Vivus Inc. (VVUS)’s Qsymia in July, the first U.S. approvals for obesity drugs since 1999. They were shown to help obese patients lose about 5 to 10 percent of their body weight in clinical trials.
That’s a start, say many in the field. Still, the need for even more new drugs remains, they said.
“The concern among clinicians is that the overall pipeline for new drugs is very, very small,” said Carey Lumeng, an obesity researcher at the University of Michigan in Ann Arbor. “We aren’t getting enough new ones to market.”
Drug development will be among the topics discussed when the 30th annual meeting of the Obesity Society opens tomorrow in San Antonio, Texas. The program will touch on all areas of obesity research, from behavioral changes and exercise to surgery and therapeutics.
In past years, “the biggest focus of the obesity meeting has been on exercise and behavior modification,” said Simos Simeonidis, an analyst with Cowen & Co., in a telephone interview. “Those things don’t work on their own; sometimes you have to do all of them together with drugs or surgery.”
Tom Hughes, chief executive officer of Cambridge, Massachusetts-based Zafgen, spent two decades at Novartis AG. (NOVN) He’s led Zafgen since 2008, forging a battle against accepted perceptions of obesity as a lifestyle choice -- the result of laziness or a lack of discipline. That view has kept many out of obesity drug development, he said.
“There are forces that keep people obese,” Hughes said in an interview. “People are fighting their physiology.”
An obese person’s body processes food differently from a lean person’s, Hughes said. One way is that the liver overproduces fat molecules, which get transported back to fat cells, or adipose tissue.
Zafgen’s drug, beloranib, is designed to reset the way the body processes fat by inhibiting an enzyme tied to the liver’s fat production. It also changes the production of hormones that control trafficking of fat and the use of fat as energy, Hughes said.
Zafgen, with five full-time employees including Hughes, uses contract researchers to run its clinical trials. Its small size is typical of companies still willing to work on obesity drug development, after larger companies concluded in recent years that getting approvals for such drugs would be too long and cumbersome a process.
Arena, based in San Diego, and Vivus, in Mountain View, California, were both small biotechs before their drugs were cleared. Both had market valuations of less than $1 billion at the start of the year; now, Vivus is worth about $2.5 billion and Arena, $2 billion.
Arena rose less than 1 percent to $9.30 at 4 p.m. New York time. The shares have increased almost fivefold this year. Vivus declined less than 1 percent to $24.28 and has more than doubled this year.
“It’s been the small companies that were willing to take the risks,” Mike King, an analyst with Rodman & Renshaw, said in a telephone interview. The approvals this year may draw some interest from larger drugmakers, he said. Obesity “is one of the last kind of monolithic markets that’s out there right now. Given the numbers, you have to expect that these would be blockbuster drugs.”
Big pharmaceutical companies would have to overcome bad memories of recent efforts in obesity drug development to jump back in. Safety issues tied to medicines’ effects on the heart and brain led to withdrawals and programs being shuttered throughout the 1990s and 2000s.
Wyeth’s Pondimin and Redux, also known as fenfluramine and dexfenfluramine, were pulled from the market in 1997 after they were linked to heart valve problems in patients who took them with phentermine, a combination known as fen-phen. The drugmaker, now owned by Pfizer Inc. (PFE), reserved more than $21 billion to settle lawsuits over the drugs.
Sanofi (SAN), the Paris-based drugmaker, stopped developing its obesity pill Acomplia in 2008 after it was pulled from the market in Europe for possible links to suicide and depression. Pfizer and Merck & Co. (MRK) also ended obesity programs that year, with Pfizer, the world’s largest drugmaker, citing “likely new regulatory requirements for approval.” All three drugs targeted a brain receptor known to make marijuana smokers hungry. New York-based Pfizer bought Wyeth in 2009 for $68 billion.
Abbott Laboratories (ABT) pulled its diet pill, Meridia, off U.S. shelves in October 2010 after it was tied to heart attacks and strokes.
The two medicines approved this year were the first cleared by the FDA since Roche Holding AG (ROG)’s Xenical in 1999.
It was an uphill battle. The drugs were both rejected by the FDA in 2010, Arena’s for concerns over cancer links and Vivus’s for worries about birth defects and heart risks. They were cleared this year on the condition the companies perform post-marketing studies to monitor safety. A third drug, Contrave, from La Jolla, California-based Orexigen Therapeutics Inc. (OREX), must undergo a cardiovascular outcomes trial before it may be approved.
Zafgen’s therapy aims to avoid those concerns. It’s designed for severely obese patients, ones who may consider weight-loss surgery. The company has completed three early-stage trials, exposing 50 patients to the drug. In the first two, patients had an average body mass index of about 39; obesity is defined as 30 or greater. The newly approved drugs, Belviq and Qsymia, are approved for patients with BMI of at least 30, or of at least 27 with another weight-related condition such as Type 2 diabetes or hypertension.
BMI is calculated using height and weight. A 6-foot man who weighs more than 220 pounds is considered obese using the formula, according to the National Institutes of Health.
Zafgen’s beloranib helped patients lose an average of 4.3 kilograms (9.5 pounds) over 25 days, compared with little change for those taking a placebo. Patients taking the medicine also saw declines in their triglycerides and low-density lipoprotein cholesterol, contributors to heart disease, and had their waist circumference shrink.
“The weight loss is three to four times what you get on other therapies,” Hughes said. “It’s roughly similar to starvation diets.”
Zafgen has started a longer study of more patients to look at safety and efficacy on a bigger scale. The mid-stage trial will examine the drug’s use for 12 weeks in 120 patients, with data expected in mid-2013.
Before this year’s approvals, Zafgen planned to seek a sale of the company once it received longer-term data on the drug. Now, the company may continue independently, Hughes said.
“The twin approvals reinstated a lot of confidence in our path,” he said. Hughes said he received e-mails of congratulations after the FDA’s announcements, even though he wasn’t working on those programs.
The success of the new-to-market drugs will factor into how much interest obesity therapeutics generate, Simeonidis said.
“We will see other companies get back into it,” said Craig Audet, head of global regulatory affairs at Arena, in a telephone interview. “I think they will take a wait-and-see approach.”
Large drugmakers’ efforts have turned to diabetes, with some testing those compounds later for obesity. Novo Nordisk A/S (NOVOB), the world’s largest insulin maker, is in late-stage trials in obesity of its diabetes medicine Victoza. Eli Lilly & Co. (LLY), the Indianapolis-based maker of medicines for diabetes, cancer and depression, views obesity as “an area of interest,” CEO John Lechleiter said in a July interview.
“It’s a very important area of medicine,” Lechleiter said, noting “Lilly doesn’t have any molecules today that I can talk about.”
Merck, based in Whitehouse Station, New Jersey, doesn’t have anything listed in its pipeline for obesity, Caroline Lappetito, a spokeswoman, said. “Obesity research is not deemed a priority area for Merck at this time.”
Arena’s Audet said a “broad development gap” occurred after Sanofi’s Acomplia was pulled from the market, prompting other drugmakers to lose interest. Arena is looking for more obesity compounds to bring to the market, he said.
“There are some smaller companies in Phase 1 and 2, but no one really that far along,” he said.
Third Rock’s Starr sees that changing.
“Drug development had been paralyzed for a while because of the lack of movement at the FDA and pharma exiting the space,” he said. “It has changed and will continue to change. If you fast forward five to 10 years from now, I would suspect this could be one of the more prolific areas for drug discovery because of the size of the problem.”
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