Staff Writer

Late-stage biotech drugs addressing potentially blockbuster markets aren't exactly falling off the trees and into big pharma's lap, yet the three leading biotech assets in the obesity space - Vivus Inc.'s Qnexa, Arena Pharmaceuticals Inc.'s lorcaserin and Orexigen Therapeutics Inc.'s Contrave - remain unpartnered.

Why?

Is it because big pharma isn't interested? Obesity has proven a disappointing gamble for drugmakers thus far. There have been late-stage discontinuations, such as Pfizer Inc.'s CP-945,598 and Merck & Co. Inc.'s taranabant. Product recalls, too, such as Sanofi-Aventis Group's Acomplia (rimonabant) and Wyeth's infamous Fen-Phen (dexfenfluramine/phentermine). And even those that have made it to market haven't been all that successful.

F. Hoffmann-La Roche Ltd. doesn't break out sales of Xenical (orlistat), but various reports have pegged it at around $100 million annually. Ditto for Abbott's Meridia (sibutramine HCl monohydrate capsules C-IV). GlaxoSmithKline plc's over-the-counter, low-dose version of Xenical, called Alli, generated just $139 million in worldwide sales last year.

Adam Cutler, analyst with Canaccord Adams Inc., said Qnexa, lorcaserin and Contrave each represent improvements over what's now available. He predicts Qnexa and Contrave could each generate peak U.S. annual sales of $1 billion and lorcaserin could bring in $850 million - any of which should be enough to generate "significant interest" from potential partners.

The lack of partnering activity thus far could be due to a few factors, Cutler said. First, when Vivus, Arena and Orexigen were looking to partner before Phase III, many of the big pharmas had their own late-stage obesity programs - programs that have since failed. Second, the three biotechs probably set prohibitively high prices back then, realizing that if they held on to their rights and funded their own Phase III programs, they could get much more money later. Third, pharma was likely just fine with that strategy, since the drug giants are willing to pay more money later if it means avoiding risk, Cutler said.

Phase III data started trickling out last year, leading to inevitable comparisons between the three programs.

Vivus's Qnexa, which combines the generic diet drug phentermine with epilepsy drug topiramate, looked to be the efficacy front-runner, as its first trial met both of the FDA's goals. The FDA wants obesity drugs to show either 5 percent placebo-adjusted weight loss or twice as many patients losing 5 percent of their weight on drug vs. placebo, and Qnexa had placebo-adjusted weight loss of 7.5 percent, with 66 percent of Qnexa patients vs. 15 percent of placebo patients losing more than 5 percent of their weight. (See BioWorld Today, Dec. 12, 2008.)

Arena's lorcaserin, a 5-HT2c serotonin receptor agonist, hit the FDA's second goal but missed the first in its initial Phase III go-round. Placebo-adjusted weight loss was just 3.6 percent, but 47.5 percent of lorcaserin patients vs. 20.3 percent of placebo patients lost more than 5 percent of their weight. (See BioWorld Today, March 31, 2009.)

Orexigen's Contrave, which combines the opioid blocker naltrexone with the dopamine stimulator bupropion, appeared to fall short of both FDA goals in its first Phase III, thanks to an intensive behavior modification program that created strong placebo results. (See BioWorld Today, Jan. 12, 2009.)

But three additional Phase III trials released last week met the FDA's second parameter. Placebo-adjusted weight loss was between 4.8 percent and 5.2 percent for the two non-diabetic trials, and the percent of patients to lose more than 5 percent of their weight was 48 percent, 56.3 percent and 44.5 percent compared to placebo values of 16.4 percent, 17.1 percent and 18.9 percent in the three trials. (See BioWorld Today, July 21, 2009.)

As for real-world potential, two obesity specialists interviewed by Cowen & Co. picked Contrave for its risk/benefit ratio. They also liked the fact that its ingredients both control addictive behavior, which may help with cravings, and they predicted it will have the easiest reimbursement of the three competitors. The doctors voiced concerns about Qnexa's high rates of paresthesia (a prickly skin sensation) and the fact that its two generic components already are widely used and combined, which could cap pricing potential. They also predicted that lorcaserin's modest efficacy would limit its use, although it might one day fare better if combined with phentermine.

Rodman & Renshaw analyst Elemer Piros wrote in a research note that potential partners "will likely wait" until all the data are in before closing any deals. But Cutler isn't so sure. He told BioWorld Insight he thinks potential partners are just waiting for complete Phase III data on any single drug - data that Contrave has now delivered.

By the time any parties likely could finish due diligence on the Contrave data, though, the rest of the data for Qnexa and lorcaserin will be available. Partners might want to look at those, too, which would push the timeline closer to advisory committee meetings and approvals, thus tempting pharma to wait even longer.

Cutler cautioned that "any company interested in the space should be worried they're going to miss out" by waiting too long, but he also noted that the three biotechs are unlikely to agree to a "surprise" deal without going back to all interested parties and playing them off one another to drive the price higher.