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Vivus, Inc. (VVUS - Analyst Report) recently announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) re-examined and confirmed its decision about not recommending the approval of weight-loss drug, Qsiva. We note that earlier, in Oct 2012, the CHMP had rendered a negative opinion on the marketing authorization application (MAA) for Qsiva.

The CHMP is concerned about the potential cardiovascular and central nervous system effects associated with the long-term use, teratogenic potential and misuse by patients for whom Qsiva is not meant. The CHMP considers a pre-approval cardiovascular outcomes trial to be essential for establishing the long-term safety of Qsiva.

We note the drug is already available in the US under the trade name Qsymia. Qsymia was approved by the US Food and Drug Administration (FDA) in Jul 2012. The FDA cleared Qsymia as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese (Body Mass Index, or BMI - 30 or more) or overweight (BMI - 27 or more) adults suffering from at least one weight-related co-morbid condition.

Though not unexpected, we are disappointed with the CHMP’s decision. The company is banking heavily on the drug for future growth. We expect to gain more visibility on the drug’s prospects in the US once the company reports fourth quarter 2012 results on Feb 25, 2013.

We remind investors that apart from Qsymia, another weight-loss drug, Arena Pharmaceuticals, Inc.’s (ARNA - Snapshot Report) Belviq, also received approval in the US last year. Orexigen Therapeutics, Inc. (OREX - Analyst Report) is also developing a candidate, Contrave, targeting the lucrative obesity market.

Vivus, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Biopharma companies that currently look more attractive include Cytokinetics, Inc. (CYTK - Snapshot Report) with a Zacks Rank #1 (Strong Buy).

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