UPDATE 3-U.S. advisers reject Vivus fat-fighting pill

* FDA advisory panel rejects Qnexa drug in close vote

* Drug works but safety issues still a concern

* Company says weight loss with drug “unprecedented”

* Vivus shares halted, rivals sink
(Recasts with panel rejection, updates shares)

By Susan Heavey and Jon Lentz

GAITHERSBURG, Md., July 15 (BestGrowthStock) – U.S. health advisers
narrowly rejected Vivus Inc’s (VVUS.O: ) experimental weight-loss
pill, saying there was not enough data to merit approval.

In a 10-6 vote, a Food and Drug Administration advisory
panel said they were concerned that Qnexa was too experimental.
Earlier the official vote was reported as 9-7 but one panelist
later said he voted in error.

Approving the drug would be “a huge public health
experiment,” said panelist Elaine Morrato of University of
Colorado.

The decision stunned investors, who had bet safety concerns
would not keep the drug from market.

Vivus’ stock was halted on Thursday, pending the panel
decision, but shares of rival drugmakers Arena Pharmaceuticals
Inc (ARNA.O: ) and Orexigen Therapeutics Inc (OREX.O: ) sank after
the vote.

FDA will weigh the advisers’ vote before making its final
decision, expected by Oct. 28

Vivus is seeking FDA’s green light to sell Qnexa to adults
to use once a day to slim down in it hopes could become the
first prescription diet drug in a decade. The company told
advisers its pill offers a safe option for shedding pounds and
improving their health.

There is little doubt the drug works, but panelists said
potential side effects such as depression, memory loss,
increased heart rate and birth defects are a worry.

Panelists were also concerned since patients may take Qnexa
for years but Vivus only studied it for about 12 months.

“The reality is when they go off (the drug) they gain the
weight… This is likely a lifelong therapy,” said panelist Dr.
Lamont Weide of the University of Missouri School of Medicine.

The stakes are huge for Vivus, which has not had a U.S.
product approved since 1996. Its shares have jumped more than
100 percent over the last 12 months with investors buoyed by
the potential market in a nation where two out of every three
Americans is overweight or obese.

The panel’s vote may also offer clues on the potential for
two rival drugs from Arena and Orexigen.

Arena shares fell more than 8 percent after the vote,
reversing earlier gains. Orexigen fell more than 14 percent.
(Additional reporting by Susan Kelly in Chicago; editing by
John Wallace, Andre Grenon and Tim Dobbyn)

UPDATE 3-U.S. advisers reject Vivus fat-fighting pill