Regulators' Decisions

There's no proof that this is what happened with Vivus' weight loss drug, but the way regulation is set up, it's certainly a possibility:

Is Arena Pharmaceuticals(ARNA) in danger of getting "Meridiacked"?

It's possible if this scenario sounds familiar: A panel of independent experts is brought to a suburban Washington, D.C. hotel meeting room by the U.S. Food and Drug Administration and asked to decide whether or not to yank a controversial drug from the market because of safety data tying the drug to an increased risk of heart attack and strokes.

The next day, this same weary panel of experts -- reminded of what happens when unsafe or ineffective drugs receive FDA approval -- returns to the hotel meeting room and sits in judgment of a new weight-loss drug.

Vivus(VVUS) learned all too well that this setup can lead to a bad outcome. Last month, the company's experimental obesity drug Qnexa was chewed up and spit out by an FDA advisory panel that had spent the previous two days arguing over the heart safety of GlaxoSmithKline's(GSK) diabetes drug Avandia.

FDA officials must have a keen sense for the dramatic because they've set up a repeat of this scenario for September.

The same FDA advisory panel is reconvening Sept. 15 to hash out data that ties Abbott Lab's(ABT) currently marketed obesity drug Meridia to an increased risk of heart attacks and strokes. The following day, Sept. 16, the panel will review the efficacy and safety of Arena's experimental weight-loss drug lorcaserin.