With the back to back approval of obesity drugs from Arena Pharmaceuticals (ARNA) and Vivus Pharmaceuticals (VVUS), there is a third, hidden winner.
We're not talking about Orexigen Theraputics (OREX) - which is also working on an obesity drug. OREX has had a nice run on the coat-tails of ARNA and VVUS, rallying hard when Arena's drug, Belviq, was approved on June 27th, because this event signified that the obesity drug approval window was once-again open after 13 years. OREX continued to rally since then, but the reality is that Orexigen is conducting a pre-approval cardio-vascular outcomes trial (CVOT) and their drug, Contrave, won't be up for approval until late 2013 at the earliest. More likely it will have a PDUFA date (the date by which FDA has to give a final response - either approval or complete response letter) sometime in 2014, based on the latest announcement from the company.
The hidden winner is Supernus Pharmaceuticals (SUPN). Supernus is a generic drug developer who just went public this past year. They are working on central nervous system therapies. On June 26th of this year, Supernus won tentative FDA approval for their drug Trokendi XR - an extended release pediatric formulation of the generic drug topiramate at dosages of 25mg, 50mg, 100mg and 200mg.
What does a pediatric anti-seizure medication have to do with the red-hot obesity space? Simple, topiramate is one of the two ingredients in Vivus' drug Qsymia. Qsymia is a single-tablet fixed-dose combination of immediate release phentermine and extended release topiramate where the dosage of topiramate is much lower than the clinically available doses used for treatment of seizure disorder and migraines. Indeed, Qsyimia contains 46 mg and 92 mg of topiramate for the recommended dose and highest dose, respectively.
Prior to the approval of Supernus' drug, Vivus investors that we spoke with correctly argued that doctors would be hesitant to substitute generic phentermine and generic topiramate for Qsymia because the lowest available dosage of generic topiramate was 100 mg, and was not an extended release formulation. Now however, Trokendi XR will be available at 50mg, and 100mg in extended release formulations. Doctors can substitute a Qsymia prescription with a prescription of generic phentermine and Trokendi XR (which is also a generic).
Supernus will not be able to market their drug until after June 2013 due to an exclusivity issue having to do with some of the topiramate safety data for infants up to 24 months of age. FDA wants the safety information in the label, and Johnson & Johnson (JNJ), the original developer of topiramate, has patent protection on this data through next June. Supernus has recently announced that they plan to begin marketing Trokendi XR in the third quarter of 2013.