Vivus shares slide as FDA delays decision on Qnexa

Shares of Vivus slid more than 6% after the news spread that the FDA would delay a final decision on its closely watched application for the weight drug Qnexa. And in a matter of minutes analysts began to handicap the company's ($VVUS) chances, with several concluding that the delay came with a tantalizing clue about its prospects.

The word from regulators was simple enough. They want the extra time to evaluate Vivus' risk evaluation plan for the drug, one of three still angling for a regulatory win after getting stiff-armed at the FDA. Vivus' chances, though, were increased dramatically in February after a majority of the FDA's expert panel concluded that Qnexa warranted an approval, based on its risks and rewards.

Looking over the Twitter feed, it was clear that there were some who felt the added time positioned Arena's ($ARNA) lorcaserin for a first approval. Others scoffed at the idea. And Cowen's Simos Simeonidis insisted in a note to investors that an OK for Qnexa may already be a done deal.

"Given what happened at the Qnexa panel, we believe the FDA has probably already decided that it will approve Qnexa," observed Simeonidis, "so we don't see any negative read-through from this delay."

After all, wrote TheStreet's Adam Feuerstein, if the FDA had decided to hand out a complete response letter on Qnexa, it would have moved on April 17. A delay has to indicate a likely approval.

We'll find out who's right by the new action date: July 17.

- here's the Reuters story
- read the report from TheStreet