Glaxo Diet Drug Under Review

We are disappointed with the latest decision by the US Food and Drug Administration (FDA) to review the safety features of orlistat. The drug is sold in the U.S. both as a prescription product (Xenical) and as an over-the-counter (OTC) product (Alli). The OTC version is sold by GlaxoSmithKline (GSK) whereas Roche (RHHBY) markets the prescription drug.

The FDA had to initiate the review process as the agency received about 32 cases of liver problems (between 1999 and 2008) in patients taking the drug in either forms, among which twenty-seven were hospitalized with six of them suffering from liver failure. The most common symptom reported was jaundice, which leads to yellowing of the skin or eyes along with stomach pain and weakness.

The obesity management drug Xenical got FDA approval way back in 1999 while the OTC version was approved in 2007. At present, orlistat has approval in approximately 100 countries with a recent (January 2009) European Union (EU) approval for the OTC version.

Alli garnered ₤75 million (approximately $122 million) in sales for GlaxoSmithKline last year and Xenical contributed 502 million CHF (approximately $473 million) in revenue for Roche. We believe the FDA review will not impact the company much as the drugs do not contribute significantly to the top-line, but in the short-term demand will be hampered.

Although no direct association between the drug and the liver problems has been established yet, no doubt the statistics mentioned earlier is a major concern for all the patients taking the drug. Since the FDA has asked the patients to continue taking orlistat and to report side effects, if any, we would like the agency to come to a conclusion fast as many lives are at stake.

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