The U.S. health regulator approved a formulation of Novo Nordisk's diabetes drug, liraglutide, for treating patients of obesity, a disease that affects one in three Americans.
The injectable drug, to be marketed as Saxenda, is the second obesity treatment to be approved this year after Orexigen Therapeutics Inc's oral medication Contrave in September.
Saxenda enters a market that is yet to realize its potential due to limited effectiveness of existing drugs, reimbursement hurdles, bungled launches and the perception of obesity as a "lifestyle" disease.
The drug has been approved for patients with a body mass index of 30 or above and at least one weight-related health condition such as diabetes, the U.S. Food and Drug Administration said on Tuesday.
A lower dose of liraglutide, marketed as Victoza, was approved for use in diabetes patients in 2010.
Novo believes Saxenda has blockbuster potential, although doctors doubt it will be a game changer.
"None of the available drugs and none ... on the horizon are sufficiently powerful to eradicate obesity," Lee Kaplan, chair of the clinical committee of the Obesity Society, told Reuters in October.
Saxenda's rivals include Vivus Inc's Qsymia and Arena Pharmaceuticals Inc's Belviq, which are taken orally.
A study showed that half the patients given Saxenda lost at least 5 percent body weight, the FDA said. Rival drugs show 2-5 percent weight loss over and above diet and exercise.
Saxenda, which works by slowing the speed at which food leaves the stomach, has a better chance of being covered under Medicare and Medicaid than rival drugs due to Victoza's established safety profile.
However, the drug is an injectable and that could hurt demand for it, physicians said.
The FDA has pulled obesity drugs off the shelves in the past, after a series of lawsuits sought to link them with debilitating side effects. As a result, doctors are reluctant to prescribe drugs without an established record of their efficacy.
Analysts expect the injection to be priced at about $40 per day compared with an average of $5-$6 for rival drugs.
Doctors and analysts believe Saxenda could do well despite the hurdles.
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