Northern, WI 2/23/12 (StreetBeat) -- Shares of Vivus Inc (Nasdaq: VVUS) nearly doubled on Thursday as investors bet that its experimental weight-loss drug, Qnexa, would be approved by U.S. regulators.On Wednesday, a U.S. Food and Drug Administration panel voted 20-to-2 in favor of approval, potentially bringing the first weight-loss pill to market in 13 years and raising hopes that two competing drugs would also be approved.
"In our view, the resounding vote of confidence from yesterday's FDA Advisory Committee meeting provides us with high confidence that Qnexa will be approved by the April 17th (review) date," JMP Securities' Jason Butler said in a research note, while raising his price target nearly three-fold to $45.
Vivus' Qnexa competes with Arena Pharmaceuticals Inc's lorcaserin and Orexigen Therapeutics Inc's Contrave.
But risks remain. The panel said Vivus should conduct a study on possible heart problems and supported the company's plan to limit its use to women who are not pregnant. One component of the drug, the anti-seizure drug topiramate, has been shown to raise the rate of birth defects.
"Qnexa's near-term approvability can still be derailed by a negative CV (cardiovascular) panel in late March or by just an independent FDA conclusion," Jonathan Aschoff, an analyst at Brean Murray Carret & Co, said in a research note.
While the FDA usually follows its advisory panel's recommendations it is not required to.
"Until then, Vivus is clearly safe and our conviction in an ultimately negative outcome was significantly reduced after yesterday," he said.
Shares of the Mountain View, California-based company were up nearly 100 percent at $21.08 in early trading on Nasdaq.
StreetBeat Disclaimer
No comments:
Post a Comment