How Big Can The Obesity Category Be?
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?78 million adult Americans are classified as obese.? |
After the advisory panel recommended Qnexa approval 20-2 last week, Matthew Herper of Forbes wrote a very interesting column questioning the potential of the obesity drug category. His piece was titled, ?Why No Obesity Drug Will Ever Be The Next Lipitor.? Of course he may be correct since Lipitor sold over $11 billion annually at its peak. His point was a bit more nuanced than saying no obesity drug will reach $11 billion.
He basically says the potential for obesity drugs is over-stated by excited analysts. He reviews past sales of obesity medications including Phen-Fen, Meridia, Xenical and Alli. No drug has done more than $500 million and most have had problems retaining users, he says.
Fair enough. I would disagree with Mr. Herper on the past as a predictor. Most of these drugs did not produce significant weight loss. They were for those that wanted that little extra to fit in their swimsuits. Onexa produces about 10% loss and that is significant. These older drugs also suffered from embarrassing and potentially risky side effects. Many consumers did not find them worth the risk or were disappointed with the results. Qnexa seems to have a good safety profile and low side effects. No
anal leakage here.
The fact is 78 million adult Americans are classified as obese. It is true that many will do nothing because they do not really care if they are fat. Of that 78 million I am guessing at least half do care and would welcome a safe, effective way to lose 10% of their body weight. The eventual size of Qnexa will depend on results and side effects. If the drug does not cause stomach discomfort and works long-term in keeping the weight off I predict enormous success. While matching Lipitor is a high goal, I am confident of a $2-3 billion dollar drug. Past obesity drugs suffered from bad image problems. Qnexa, if it can prove safety and good results, will have the repeat rate not seen in older drugs.
Mr. Herper is right to say that this category has been full of drugs with over-expectations and under-performance. I think he is underestimating how much Americans want a pill solution to that 20 -25 pounds they want to lose. If Qnexa or others in the pipeline safely deliver that level of reduction, I see blockbuster. Qnexa, to reach Lipitor levels, would need about 10 million regular users, assuming a price of about $1,000 per year. The total market is certainly big enough, because beyond the 78 million obese, there are millions more who are overweight. Ultimately, that may be the biggest user base for Qnexa. People who can achieve their ideal weight through Qnexa would be very happy. I weigh 185 and losing 10% of that would put me at my weight I was 30 years ago. Would I take Qnexa if proven safe long term? You bet, even if it were not covered by insurance. To be a 40 regular with a 33 waist again would make me very happy in my old age!
Bob Ehrlich, Chairman
DTC Perspectives, Inc
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