SOURCE: The Bedford Report

The Bedford Report

January 24, 2011 11:25 ET

Drug Makers Set to Profit From Growing Obesity Rates

The Bedford Report Provides Analyst Research on Vivus & MannKind

NEW YORK, NY--(Marketwire - January 24, 2011) - Over the past year, obesity drug makers have become one of the most popular speculative plays in the market. Due to the overwhelming percentage of overweight Americans, an effective and safe weight loss drug was seen to have astronomical earnings potential. The problem is that the FDA has proven to be very hesitant to approve prospective obesity drugs due to both safety and efficiency concerns. With such uncertainty in the obesity drug market, those who argue that obesity will remain a North America epidemic may be inclined to invest in drugs related to weight problems instead. The Bedford Report examines the outlook for companies in the Healthcare Sector and provides research reports on Vivus, Inc. (NASDAQ: VVUS) and MannKind Corporation (NASDAQ: MNKD). Access to the full company reports can be found at:

After an FDA advisory panel rejected obesity drugs from Vivus and Arena last summer, speculation in obesity drugs all but disappeared, and shares were sent plummeting. However, investors were given an early -- and much unexpected -- Christmas gift last month when a Food and Drug Administration committee voted 13 to 7 that the benefits of Orexigen Therapeutics' new obesity drug Contrave outweigh the potential risks. The news created a significant rally for all diet drug makers.

Vivus saw its share price fall last Friday, after FDA regulators asked about an analysis of birth defects related to an ingredient in its experimental weight-loss drug, Qnexa.

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As most know, the outbreak in obesity has led to an outbreak in type 2 diabetes, which in turn has led to a surge in insulin manufacturer's profits. California-based MannKind Corp has been seeking FDA approval for an inhalable form of insulin called Afrezza. Shares of the company were sent plummeting last week after the FDA asked for two new studies of the device in patients with Type 1 and Type 2 diabetes. The company's founder, Alfred Mann, was still optimistic and encouraged by the fact the FDA has not asked for anything other than these bridging studies, in terms of clinical work.

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