Memorandum

Arena’s Belviq approved by the FDA; first anti-obesity medication approved in the US in 13 years

Executive Highlights

  • The FDA approved Arena’s Belviq for chronic weight management in adults who either are obese (BMI ≥30 kg/m2) or are overweight (BMI ≥27 kg/m2) and have at least one weight-related comorbid condition.
  • Since Belviq has to go through DEA scheduling before it can be marketed, it will be at least four to six months before Belviq launches; as such, we expect launch in early 2013.

Arena announced that the FDA approved lorcaserin (Belviq) for chronic weight management in adults who are either obese (BMI ≥30 kg/m2) or overweight (BMI ≥27 kg/m2) and have at least one weight- related comorbid condition (e.g., hypertension, type 2 diabetes, dyslipidemia). Since Belviq is classified as a controlled substance, it will need to go through a four-to-six-month scheduling process with the Drug Enforcement Agency (DEA) before it can be marketed, placing potential launch in the late- 2012/early-2013 timeframe. Under the terms of Arena and Eisai’s partnership, Arena will manufacture Belviq and Eisai will commercialize the drug.

Importantly, the label includes a strict stopping rule – people are to stop using the drug if they do not achieve at least 5% weight loss after 12 weeks of treatment; this will ensure that individuals are not exposed to the potential risks of the drug when they are not benefiting from its use. As expected, there is messaging on the label that Belviq is not to be used with other weight-loss drugs (since its efficacy and safety in combination with other obesity drugs hasn’t been established), and that the drug will be contraindicated for use during pregnancy (Category X, like all other obesity medications). Perhaps surprisingly, however, the FDA did not require any educational efforts for HCPs and patients in their guidelines.

The approval of Belviq reflects the increasing recognition of obesity as a medical condition with significant unmet need, and increases the likelihood that other obesity drugs will also be approved. In the near term, Vivus’ Qnexa is expected to receive FDA approval in mid-July. Given that Qnexa has greater efficacy and tolerability, is once daily (in contrast to Belviq, which is twice daily), and will likely have better prospects for reimbursement, we think that Qnexa will have an advantage over Belviq in the marketplace. However, there will certainly be room in the market for both drugs, given that there are so many individuals in need, and that there won’t be one drug that works for everyone – in a recent discussion we had with Dr. Arya Sharma (University of Alberta, Edmonton, Canada), he emphasized that Belviq will not be a cure-all for obesity; he hopes patients and HCPs will use the drug to treat chronic conditions, rather than use it indiscriminately.

LABELING

  • Currently, the drug is approved for treatment of adults who are obese (BMI ≥30 kg/m2), and those who are overweight (BMI ≥27 kg/m2) who also have at least one weight-related comorbid condition (e.g., hypertension, dyslipidemia, type 2 diabetes). As expected, Belviq will be contraindicated for use during pregnancy (Category X; like all other obesity medications). The safety and efficacy of Belviq combination therapy with other weight-loss products has not been investigated, and the drug's effect on cardiovascular adverse events has not been fully explored. Furthermore, given that the drug is a serotonin 2C receptor agonist, studies establishing the safety and efficacy of co-administration with other serotonergic or antidopaminergic agents are warranted. Three double-blind, randomized, placebo-controlled trials conducted prior to approval demonstrated that the most common adverse reactions for patients without diabetes treated with Belviq were headache, dizziness, fatigue, nausea, dry mouth, and constipation.
  • Given the risk aversion FDA has historically shown with obesity drugs, we were surprised that there are no required educational efforts for HCPs and patients. We were also surprised certain tools like patient guides were not required. Doctors will have a lot of responsibility and latitude with regards to prescribing the drug, which theoretically could be a negative in terms of overall safety due to the potential, if unlikely, risk of a "rogue" doctor wanting to give the treatment to too broad an array of patients.
  • The label includes strict discontinuation instructions for individuals who do not achieve a minimum 5% weight loss after 12 weeks of treatment. This is a positive both for payers and for patients whose doctors might as a result try to figure out more quickly if the drug is working, but is a negative for the company. In Belviq's trials, about 56% of all people taking the drug did not achieve a weight loss of 5% (about two-thirds of all people with diabetes did not).

COMMERCIAL PROSPECTS

  • Arena stated that it will be four to six months before they and Arena can launch Belviq, since the drug has to go through DEA scheduling. While TOS in San Antonio (Sept 20-24) would be a great place to launch, it is highly unlikely that the DEA scheduling process would be complete by then. We think it would be excellent for Arena/Eisai if they could launch the drug anytime in 2012, but expect a launch time of early 2013.
  • Arena will manufacture the drug in Switzerland and its partner Eisai will be in charge of sales and marketing. See here for our report from 2010 with details on the partnership – we believe it had very good terms for Eisai given that they took on some significant risk in partnering with Arena in light of approval uncertainty. This approval is very good news for Eisai, who had a major patent expiration recently (Aricept, an Alzheimer's drug with 2011 sales of ~ $3.6 billion) and is expecting another in May 2013 (AcipHex, a gastroesophageal reflux disease drug with 2011 sales of $1.7 billion). There is still commercial uncertainty; however, in our view, the upside will be in patients who do not respond to Qnexa who are "super responders" for Belviq using the drug. In a country with over 100 million adults who could potentially use this drug for weight management, there is considerable room for people who do not respond to Qnexa to take this compound. Ultimately though, we think that if Belviq is going to be truly competitive in the future when Qnexa is also on the market, it will need to be combined with other weight-loss compounds for improved efficacy. We assume work on FDC’s will begin soon.
  • There are four other commercial points relating to: 1) dosing schedule; 2) pricing; 3) marketing and; 4) naming. Belviq will be prescribed as twice a day, a disadvantage to once-daily Qnexa. There was no information given on pricing but we assume the equivalent of $4- 6 a day would be in the ballpark. On marketing, surprisingly, there appear to be virtually no restrictions on Arena or Eisai for how Belviq should be marketed, which could be quite the advantage for Belviq. On the naming front, the FDA must not have approved the first name Arena was considering – Lorqess (which kind of sounds like less). Belviq seems at least like an easy to remember name to us, though there's no obvious positive association (like with the words less, victory, etc.).
  • In a conversation we had with obesity expert Dr. Arya Sharma (University of Alberta, Edmonton, Canada), he pointed out that while Belviq won't represent a magic bullet for obesity, it will hopefully be used by those who need to treat obesity for medical reasons. He also said that he hopes doctors and patients will realize the drug should be used for chronic conditions and that they won't use it indiscriminately. Overall, he did not sound enthusiastic about the prospects for this drug being widely reimbursed. He emphasized, however, that the FDA's positive decision on Belviq certainly raises approval expectations for other obesity drugs in the field – a positive for patients and for HCPs looking for alternatives for patients.
  • The prevailing expectation is that the FDA will approve competitor Vivus' Qnexa in mid-July; we think it may beat Belviq to market because it can use the phentermine schedule with the FDA. On the market Qnexa will have an advantage over Belviq, since it has greater efficacy and tolerability (we see the latter as more important from a commercial perspective) and it is taken once daily. Furthermore, we anticipate it having a better chance at gaining reimbursement for people with diabetes due to its promising co-morbidity data (Vivus showed data at ADA 2012 suggesting ~90% slower progression to diabetes with Qnexa treatmentsee our ADA 2012 obesity report here. The trial presented at ADA showed that Qnexa resulted in 7% placebo-adjusted weight loss, reduced the need for diabetes medications, and, importantly, dramatically slowed the progression from pre-diabetes to diabetes).

ADDITIONAL CONTEXT

  • In the BLOOM-DM study (n=604) (published in Obesity the day of Belviq’s approval), the drug brought about significant improvements in glycemic control (1.0% reduction from baseline A1c ~8.1%). The timing of the piece is a boon for both Obesity and Arena, who will likely be able to leverage the visibility of the drug approval timing. In the trial, a greater proportion of patients receiving Belviq achieved a 5% or greater weight loss from baseline compared with placebo over a year (44.7% on Belviq 10 mg once-daily, 37.5% on Belviq 10 mg twice-daily, and 16.1% on placebo). The most common adverse events for patients with diabetes treated with Belviq were hypoglycemia (undoubtedly associated with sulfonylureas [SFUs]), headache, back pain, cough, and fatigue. Further studies establishing the efficacy of this drug for the general type 2 diabetes population are still required, and it will be interesting to see data emerge on it slowing progression to diabetes (though it's not clear if payers will cover Belviq over a cheaper drug like metformin, were a prediabetes pathway to be put in place by the FDA).

 

- by Lisa Rotenstein, Hannah Deming, Cati Crawford, Tanayott Thaweethai, Vincent Wu, and Kelly Close