Novo Nordisk kick-starts its obesity franchise with a long-awaited FDA nod

The FDA's recent affinity for early approvals apparently didn't apply to Novo Nordisk ($NVO). Two months after its self-imposed deadline, the agency finally signed off on the Danish drugmaker's first weight-loss therapy, a milestone for the company as it blueprints a future in the obesity drug market.

The FDA approved Novo's Saxenda, a higher dose of the blockbuster diabetes treatment liraglutide, for use in managing weight alongside diet and exercise. The drug is indicated for patients who qualify as obese, with a body mass index (BMI) over 30, and those with BMIs of at least 27 who also have one or more weight-related conditions, like hypertension.

In one Phase III trial, Saxenda helped 92% of overweight subjects lose weight compared with 62% on diet and exercise alone, and patients who completed the 56-week study lost an average of 9.2% of their body weight, significantly beating out the 3.5% with placebo.

Despite the delay in approval, Novo still believes Saxenda will serve as a springboard into a bright future developing weight-loss treatments. The company has already mapped out a Seattle hub for its future obesity R&D, planning to employ about 60 dedicated researchers there by 2016. Novo's plan is to make obesity a full-fledged therapeutic area, sitting alongside the company's expansive efforts in diabetes and hemophilia and taking the place of inflammatory disease, from which the drug developer is walking away.

Liraglutide, marketed at lower doses as Victoza, brought in about $2 billion for Novo last year, and analysts have said Saxenda's approval could add as much as $1 billion more to the injectable drug's net annual sales.

But despite Novo's mix of expertise and optimism, the recent history of weight-loss therapies likely spells an uphill battle for Saxenda. Two years ago, both Arena ($ARNA) and Vivus ($VVUS) won FDA nods for new obesity pills with blockbuster hopes, but safety concerns and payer disinterest led to disappointing launches, and both companies have struggled to gain any market traction. In September, Orexigen ($OREX) picked up FDA approval for Contrave, its long-delayed weight-loss treatment, but investors worry that the drug's daunting list of potential side effects will doom it to the same fate.

- read the FDA's release

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