The US Food and Drug Administration (FDA) recently issued a warning to pregnant women or women of child-bearing age who were being treated either with epilepsy drug Topamax (topiramate) or its generic equivalent. The regulatory body said that there was a risk of oral clefts among babies born to women who were on the drug during their pregnancy. Oral clefts can lead to problems of eating or talking and to ear infections in new born.

The FDA intends to implement a stronger warning on the label of topiramate in order to caution patients about the risks associated with the drug.

Johnson and Johnson (JNJ) markets Topamax for the treatment of certain types of seizures in epilepsy patients. The drug is also used to prevent migraine headaches. However, Topamax cannot be used to relieve the pain of migraines. The drug lost patent protection in 2009 and has been facing severe generic competition since then.

Vivus Inc. (VVUS) was affected by the news as the company’s lead pipeline candidate, Qnexa, is a combination drug of topiramate and phentermine.

The warning by the FDA about birth defects among pregnant women being treated with topiramate is an additional setback for Qnexa, which has already received a complete response letter (CRL) in October 2010. The regulatory body had asked for clinical and safety update, labeling change and a Risk Evaluation and Mitigation Strategy for Qnexa. Vivus has submitted a briefing document to the FDA in response.

Vivus is also studying Qnexa as a treatment for obstructive sleep apnea and diabetes. For both the indications, the candidate has completed mid-stage trials.

Apart from Qnexa, the company has one more drug in its pipeline – avanafil – which recently reported positive late-stage trial results on erectile dysfunction (ED). Vivus plans to complete the new drug application (NDA) filing for avanafil for ED in the second quarter of 2011.

Neutral on Vivus

We currently have a Neutral recommendation on Vivus, which is supported by a Zacks #3 Rank (short-term Hold rating). We expect investor focus to remain on Vivus’ future course of action for avanafil and the approval of Qnexa.

 
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