Vivus shares drop amid speculation about IP threats to diet drug

To show just how delicate faith can be in weight-drug developers, Vivus' ($VVUS) and Orexigen Therapeutics' ($OREX) shares took hits on Thursday amid buzz about potential weaknesses in Vivus' patents for the newly approved obesity pill Qsymia. Citron Research, a short seller, began stirring the pot with a report on its website about the threat of Johnson & Johnson ($JNJ) challenging patents to Vivus's weight drug, which uses the generic anticonvulsant toperamate as one of two active ingredients.

Vivus' shares, which had rallied earlier this week after the FDA's approval of Qsymia, fell 13% yesterday, Reuters reported. And Orexigen, which is in late-stage development of another combo pill against obesity, saw its own shares drop 10%.

Orexigen, Vivus, and Arena Pharmaceuticals ($ARNA), which got an FDA nod for its diet pill last month, have each been on a regulatory rollercoaster with their weight drugs in recent years. And Citron's report punctuates the fact that the companies face new hurdles. For example, Vivus' Qsymia, of course, consists of toperamate and another generic drug, the appetite suppressant phentermine, making knockoffs of the medicine a looming danger to its blockbuster prospects, Reuters noted. 

As Reuters points out, Orexigen's experimental Contrave uses versions of naltrexone and bupropion to help people lose weight. That drug comes with the added risk of an unapproved med, which, like other diet drugs, must pass a high safety bar and alleviate concerns about cardiovascular side effects to enter the market.

- read more in Reuters' article

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