Vivus APPLAUDED! FDA Approves Second Diet Drug in a Month

Less than a month after Arena Pharmaceuticals (NASDAQ:ARNA) received the first FDA approval of a weight-loss drug in thirteen years, Vivus (NASDAQ:VVUS) became the second as the U.S. Food and Drug Administration granted its patent on Tuesday for Qsymia, formerly known as Qnexa, in a highly anticipated decision observed by many investors and traders salivating for the next big drug catalyst investment on Wall Street.

Based on the trial results, patients taking Qsymia for a year lost 6.7 percent of their body weight in one study and 8.9 percent in another study, the FDA reported. The Qsymia results outperformed two other weight loss pills reviewed by the FDA recently.

Qsymia is really a combo of two older drugs that have been known to aid weight loss: phentermine and topirimate. Phentermine is a stimulant that curbs an individual’s appetite, taken for short-term weight loss. Topiramate is an anticonvulsant, sold by Johnson & Johnson (NYSE:JNJ) as Topamax, causing people to feel more full after a meal.

Consolidation can become common with pharma companies holding top performing drugs — the pharma giants like Johnson & Johnson (NYSE:JNJ) and Pfizer (NYSE:PFE) buy up-and-coming pharma companies with high potential blockbuster drugs to add to their own offerings, or sometimes simply to smother competition. And, they have deep pockets that make it easy to do so.

On the other hand, a giant like Johnson & Johnson (NYSE:JNJ) can simply just battle the little guys too. Recently, J&J issued a positive report on a prostate cancer drug that is a competitor to Dendreon’s (NASDAQ:DNDN) Provenge. Shares of Dendreon are down over 50% in the past 6 months!

Vivus’s Qsymia targets multiple brain signals that cause people to consume more food than necessary. Analysts estimate Qsymia can potentially generate $1 billion in sales by 2016, very lofty and hopeful projections. Meanwhile, competitor Arena Pharmaceuticals Inc. (NASDAQ:ARNA) is set to begin selling Belviq in early 2013.

Vivus (NASDAQ:VVUS) shares are receiving spotlight attention for the drug approval as many investors and traders on Wall Street have been anxiously awaiting an FDA answer.

Vivus (NASDAQ:VVUS) stock is up over 11% at at $29.40 this morning while shares of Arena (NASDAQ:ARNA) are lower over 8% at $10.11.

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