The Obesity Drug War Continues

Motley Fool health care analyst Max Macaluso and Fool contributor Brian Orelli sat down to discuss the impending launch of Arena Pharmaceuticals' (NASDAQ: ARNA) obesity drug Belviq and the obesity drug market in general. Their conversation follows:

Max Macaluso: So, Brian, let's start by talking about Arena Pharmaceuticals' fourth-quarter results. I listened to the conference call on Monday and was hoping to get a clearer picture of when Belviq will actually be available. The drug is ready to be launched by Arena's partner Eisai, but the DEA scheduling is still not complete. Why is this process taking so long?

Brian Orelli: Belviq has the potential for abuse, so in addition to the FDA approval, the companies had to get the DEA involved.

The drug's potential for abuse is pretty low. The FDA recommended a Schedule IV designation, which shouldn't hamper marketing the drug beyond filling out some additional DEA paperwork. Sleeping aids are usually Schedule IV; Pain medications like OxyCotin or Viodin are either Schedule II or Schedule III and have more restrictions since they have more potential for abuse.

The DEA agreed with the FDA and gave it a Schedule IV designation. But then there's a 30-day public comment period. Then the DEA has to go through the comments before it makes its final ruling.

The comment period ended in January, but Arena's management said the DEA had received a larger than normal number of comments. The ironic thing is I imagine there are a lot of passionate Arena shareholders that sent in comments supporting the drug, maybe even arguing it should get a less-severe Schedule V designation, which is delaying the launch even more.

Macaluso: Assuming the scheduling for Belviq finishes up in the coming weeks and the drug gets on the market, it won't have the same REMS restrictions as VIVUS' (NASDAQ: VVUS) Qsymia. Do you think this might give Belviq an advantage over Qsymia, or will it not make a big difference?

Orelli: There are parts of Qsymia's REMS that are probably hampering it, specifically the requirement that patients go through mail-order pharmacies. But VIVUS is trying to get that expanded to retail pharmacies, so it doesn't look like Arena will have that advantage for much longer.

The REMS also says that doctors are supposed to go through a 15-20 minute training, but that doesn't seem to be a major issue; from mid-December to mid-February, the number of prescribers went up more than 50% to almost 12,000 providers. If Belviq had launched first, the added work by the doctors might have been an issue, but I'm not sure it's a problem now.

And the REMS actually gives VIVUS an advantage because every patient is tracked, so they have excellent data telling their sales force exactly which doctors are prescribing the drug.

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The Obesity Drug War Continues