Well, well, well, look what we have here, shares of Vivus (VVUS) are up nearly 100% after hours as they gained initial approval for their weight loss drug, Qnexa. Yeah, the wallets of Vivus shareholders are getting jolly fat with the stock screaming higher, going from $10 a share to $20. This is what you call a short squeeze, with 15.60 million shares short, roughly 20% of float, there are a lot of people rushing to buy back their shares.
Advisers to the Food and Drug Administration voted 20-2 today that Qnexa’s benefits outweigh its risks at a meeting at agency headquarters in Silver Spring, Maryland. The FDA isn’t required to follow the panel’s recommendation. The agency is scheduled to make a decision on the drug, which it rejected in 2010, by April 17.
Qnexa is one of three medications vying for the first U.S. approval of a prescription weight-loss treatment since Swiss drugmaker Roche Holding AG (ROG)’s Xenical in 1999. The FDA plans to have advisers discuss in March the possibility of requiring heart-risk studies for all weight-loss drugs. Panel members discussed whether Vivus should conduct such a study before or after approval.
“Of all the obesity drugs, this one has the highest efficacy in terms of weight loss, so that shifts the balance in terms of requiring a post-approval study rather than a pre- approval study,” said Sanjay Kaul, a cardiology professor in the David Geffen School of Medicine at UCLA Cedar Sinai Medical Center and a panel member.
Full story over at Bloomberg.
The potential for earnings for a so called weight loss drug would be amazing. Just think, people could stuff themselves with Taco Bell and Kentucky Fried Chicken and slurpees and then just take a pill and everything would be magic. No, I’m sure it doesn’t work that way. As you know, there are no short cuts. I’m guessing this weight loss pill helps curb their appetite for fatty foods and helps people whose weight has reached dire proportions.