UPDATED: Vivus: EU regulators expected to balk on obesity drug

After giving investors multiple reasons to celebrate, Vivus ($VVUS) issued some sobering news today about its new weight drug, saying that the company expects European Union regulators to advise against approval of the treatment in October. Depending on the actual outcome, Vivus could be in for a much longer journey to advance the drug to the market in key EU countries.

This could be a buzzkill for Vivus' investors riding high on news of the launch of the diet drug, Qsymia, in the U.S. earlier this month. Mountain View, CA-based Vivus announced this morning that, depending on the opinion of the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP), the company faces either having to resubmit its application for EU approval sometime down the road or mounting an appeal to have the CHMP give its existing app another look.

Vivus' shares slide down by 11.2% to $21.07 as of 10:53 a.m. ET on Friday.

Today's news might dampen the outlook for new obesity drugs. The FDA gave the drug its blessing in July, making the combo of phentermine and topiramate one of the first new treatments for obesity to garner U.S. approval in more than a decade. U.S. regulators approved Vivus' and Arena Pharmaceuticals' ($ARNA) Belviq in July and June, respectively, with conditions that both groups do post-market studies to track safety.

Apparently, EU regulators may not see eye-to-eye with their U.S. counterparts on the approvability of Vivus' drug and may ask for additional data prior to reconsidering a market green light. (The company wants to market the drug in the EU under the name Qsiva.) After his chat with Vivus execs, JP Morgan analyst Cory Kasimov surmised that the chief concern among EU regulators is the phentermine ingredient of Qsymia, as that drug isn't approved in Europe as in the U.S.

Obesity is a major health problem in both the U.S. and Europe and can lead to Type II diabetes, heart disease and other issues. In Europe, according to Vivus, half of adults are obese or overweight. Indeed, there's a blockbuster market for weight drugs, but pharma groups watch regulatory trends closely to gauge whether new drugs for certain conditions have good shots at approval.   

- here's Vivus' release
- check out Reuters' report

Editor's Note: This story has been updated with stock price and analyst insight.

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