Jefferies Comments On New FDA Insight On Obesity Drugs

Based on FDA commentary, Jefferies believes that the question of whether to require pre-approval vs. post-approval CV safety studies for obesity remains a controversial topic of internal FDA debate. Current investor sentiment on Vivus VVUS may not reflect the risk of a potential delay to Qnexa approval. Dr. Jenkins (FDA's Director of new drugs) acknowledged that the FDA was considering whether such drugs increase CV risk and was negative on the idea of relying on surrogate markers to assess CV outcomes, he was expectedly noncommittal on the issue of pre-approval CV testing for new obesity drugs, saying "it is an area we are starting to grapple with for obesity.. what should be pre-approval." In Jefferies followup discussions, Dr. Jenkins noted the difficulty in obesity CV safety trial design, balancing feasibility with the desire to enroll a real world population, but also acknowledged that the large size of the obesity market would facilitate enrollment of large safety studies. Jefferies has an Underperform rating and $4 PT on VVUS VVUS closed Thursday at $9.12