Vivus Inc's Qnexa was one of three promising obesity drugs rejected by the U.S. Food and Drug Administration in the past two years over safety concerns.

It is the first to come back up for review after more extensive clinical trials, as public health officials urge the FDA to consider a medical treatment for a condition that affects about one-third of Americans.

A panel of outside experts to the FDA voted 20-2 to recommend approval of Qnexa, saying they were convinced that the benefits it offers in treating obesity outweighed the potential heart risks and birth defects associated with the drug.

Vivus shares nearly doubled in value to $21.01 in afterhours trade following the panel vote.

Panelists did say Vivus should conduct a study on possible heart problems and supported the company's plan to limit its use to women who are not pregnant.

During discussions, panelists seemed divided on whether the heart-focused safety study should happen before or after the drug is approved. They took no formal vote on that issue. A pre-approval study could delay the time before Qnexa is available to patients.

Shares of fellow obesity drugmakers Orexigen Therapeutics and Arena Pharmaceuticals got a 17 percent boost in extended trading.

"The vote reflects the clinical community's concern about the challenge of obesity," said JMP Securities analyst Charles Duncan.

"I continue to believe Orexigen's Contrave and Vivus' Qnexa remain approvable drugs and are going to move forward," Duncan said. "I am less positive on Arena's Lorcaserin."

The FDA usually follows panel recommendations, although it is not required to. It will make a final decision by April 17.

"Everyone around the room knows obesity and its substantial health risks," said Dr. Susan Yanovski, an advisory panel member and director of the obesity and eating disorders program at the National Institutes of Health.

"I would say not treating obesity is not risk neutral. We have few treatments for obesity for those who don't respond to lifestyle treatments."

LOSING 10 PCT OF BODY WEIGHT

Obesity, a leading cause of diabetes, heart disease and other serious health problems, has reached epidemic proportions in the United States, with about a third of the population obese and more than half overweight.

The FDA has set a high approval bar for weight loss drugs because such a large portion of the general population is likely to want to take them, and has not approved a new obesity drug since 1999.

The agency has experienced previous high-profile safety scares involving diet drugs. In 1997, the infamous diet drug "fen-phen" was pulled from the market after reports of fatal heart-valve problems in some users. Another diet pill, Meridia, was pulled from the U.S. market in 2010 after being linked to heart problems.

The only prescription obesity drug currently approved for long-term use is Roche Holding AG's Xenical, which got the FDA's nod in 1999. GlaxoSmithKline markets a lower-dose, over-the-counter version called Alli. But both have their side effect issues, including liver problems and uncontrolled bowel movements, and provide only modest weight loss.

Qnexa, which combines the appetite suppressant phentermine and anti-seizure drug topiramate, helped patients lose at least 10 percent of their weight after a year of treatment, the company said.

FDA staff reviewers said patients taking the drug had more safety problems, including memory loss and higher heart rates, than those on a placebo, and some of these problems could get worse over time.

However, Vivus said the drug also reduced blood pressure, and a link between heart rates and heart health was not conclusive. Panelists called for the company to study whether a higher heart rate was tied to heart health.

"They need to step up to the plate and do the cardiovascular outcomes trial, and do it fast," said panel member Dr. Sanjay Kaul, professor in the division of cardiology at Cedars Sinai Medical Center in Los Angeles. "I also encourage the FDA to hold their feet to the fire."

FDA staff also noted that exposure to one of the ingredients in Qnexa has been linked to a higher rate of birth defects. A Vivus study showed topiramate caused a higher rate of oral clefts in infants of women taking the drug during pregnancy

The FDA has said the rate of potential birth defects is about two to five times higher with topiramate than with a placebo.

Vivus officials said obesity, and its common symptom diabetes, come with their own risks to pregnancy, such as stillbirth, premature birth and other complications.

Arena and Orexigen have been pitching their own fat-fighters to the FDA after rejections.

In February, Orexigen agreed with the FDA on the design of a 10,000-patient heart-safety trial required for the approval of its Contrave drug. The FDA rejected the drug pending the outcome of the trial, despite a 13-7 positive vote from a panel of FDA advisers.

The FDA is also set to review Arena's lorcaserin by June 27, after rejecting it in October 2010 because of a potential cancer risk.

(Reporting by Anna Yukhananov; Additional reporting by Deena Beasley in Los Angeles; Editing by Michele Gershberg, Tim Dobbyn)

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