(Reuters) - Vivus Inc said U.S. health regulators asked the company to remove a contraindication in the proposed label of its obesity drug Qnexa, a move that could help it reach a broader patient population.
Shares of the company rose as much as 17 percent to $11.90 on Monday on the Nasdaq -- their highest since Qnexa first failed to win the backing of an advisory panel almost 18 months ago.
The U.S. Food and Drug Administration asked Vivus on Monday to remove the Qnexa contraindication for women of child-bearing potential.
"We were able to confirm that this development was initiated by the FDA and not the result of request from the company, which we believe is notable," J.P. Morgan analyst Cory Kasimov said in a note to clients.
However, Qnexa will remain contraindicated for women who are pregnant. A contraindication means the drug should not be used in specific diseases or patient classes due to potential risks.
Qnexa contains topiramate, which is used to treat migraine and epilepsy, and last month, data from a trial showed topiramate posed risks for pregnant women.
Vivus, which has faced multiple regulatory hurdles on Qnexa, had in October resubmitted a marketing application for the drug with a narrower indication that excludes women of childbearing potential.
The company is currently revising its proposed risk evaluation and mitigation strategy based on the change in the contraindication and plans to discuss details during an upcoming panel meeting in late February.
The FDA has set a review date of April 17 for Qnexa, by when it is expected to give its verdict on the drug.
However, analyst Kasimov said he does not rule out the possibility that the FDA may view Monday's announcement as a major amendment and request more time to review the application.
"We think shifting the approval timeline by a few months will have little bearing on the stock's valuation," Kasimov said.
Obesity, a leading cause of diabetes, heart disease and other serious health problems, has reached epidemic proportions in the United States with nearly a third of the population falling into the category.
Obesity drug developers Arena Pharmaceuticals, Orexigen Therapeutics and Vivus have hit several roadblocks in recent times as the FDA has set a high bar for treatments that are likely to be taken by a large number of people.
While Arena's lorcaserin has been connected to possible cancer risks, Orexigen's Contrave was sent back on heart safety concerns.
Orexigen's shares were trading up 1 percent, while those of Arena were trading down 1 percent on the Nasdaq.
(Reporting by Esha Dey and Balaji Sridharan in Bangalore; Editing by Roshni Menon)