Vivus Hammered After FDA Panel's 'No' Vote; Orexigen Down, Arena Up
Vivus closed at $12.11 on Wednesday. Trading was halted on Thursday pending the FDA advisory panel vote.
While the FDA acknowledged the drug works, panelists were concerned the drug was too experimental, as only a 56-week trial was done. But patients may take a drug like Qnexa for years, and panelists wanted more information on its long-term effects. Among other things, they expressed concerns about such possible issues as birth defects, depression, memory loss and increased heart rate.
Vivus shares were downgraded at JPMorgan, Needham and Jefferies.
Shares of Vivus rivals Orexigen (OREX) and Arena Pharmaceuticals (ARNA) have experienced wild swings over the past few days, first rising on hopes the Vivus drug would be supported, then falling when it wasn't.
Orexigen shares, which closed down 10%, are down over 6% in premarket trading. JPMorgan lowered the stock's target price from $13 to $8.
Arena shares, which closed down 8.4%, are up 22% before the bell: The safety profile of its obesity drug, lorcaserin, is deemed the best of the three. JPMorgan upgraded the shares from neutral to overweight.