Europe Denies Obesity Drug Approval

VIVUS had requested a re-examination of the opinion after the first denial. The EMA again declined marketing authorization and the committee indicated that a pre-approval cardiovascular safety trial would be necessary to establish long-term safety. Qsiva is known in the United States as Qsymia and it was approved by the Food & Drug Administration in July 2012. The effect of Qsymia on cardiovascular morbidity and mortality has not been established, nor has its safety and efficacy as a combination treatment.

The company is expected to report earnings next week and estimates are for sales to be only about $3.1 million. Sales in the current quarter ending in March are for sales of $16.6 million with annualized 2013 sales protected to be $103.7 million (estimates from Thomson Reuters).

There are two closely watched obesity drug makers which often trade close to in-tandem with each other when news is out. Orexigen Therapeutics, Inc. (NASDAQ: OREX) closed down 5.8% at $5.30, and Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) closed down 2.9% at $8.07.

VIVUS shares closed down 1.9% at $12.88 on the day and the after-hours reaction is down more than 3% at $12.16.