Arena surges on weight loss drug approvalJune 27, 2012: 3:21 PM ET
The news sent shares of Arena (ARNA) surging 35%, giving it a year-to-date gain of a whopping 428%. Not bad for a company that not many mainstream folks have heard of. That could be good news for Vivus (VVUS), which is hoping to get its own weight loss drug approved later this month.
Obesity is a huge (no pun intended) problem and Belviq is the first prescription weight-loss drug to get FDA approval in 13 years. Abbott Labs (ABT) pulled its weight loss drug Meridia last year, at the FDA's request, due to increased risks of heart attack and stroke.
Fighting the obesity epidemic has been a hallmark of First Lady Michelle Obama's physical fitness campaign. And let's not forget New York City Mayor Michael Bloomberg, who pushed for banning trans fats from restaurants and most recently turned his attention to sugary drinks larger than 16 ounces.
Of course, what's good for one (or two) companies, is of course not always good for others. Shares of Weight Watchers (WTW) slid to a new 52-week low, although Nutrisystem (NTRI) managed to step higher.
Belviq is supposed to be used in conjunction with a low calorie diet and exercise program. It's also targeted toward people who have related so-called comorbid conditions like hypertension or Type 2 diabetes.
"The FDA approval of belviq is an important development for patients who struggle with obesity or are overweight with comorbidities and need help with chronic weight management beyond diet and exercise," said Arena CEO Jack Lief.
Surprisingly, or not, the list of common side effects isn't too chilling... nausea, dizziness, fatigue, headache and, of course, constipation.