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Obesity Drug Sales Forecasts – Why They Are Out of Whack

How many times now have we heard about the next new anti-obesity drug blockbuster, that never met expectations? The next multi-billion dollar/year magic pill? Qnexa by Vivus is the latest to get a nod from an FDA review panel. Soon we'll be hearing the Wall Street analysts proclaim Qnexa's virtues, the growing global obesity problem and the sure fire $1 billion sales.

Don't believe all the hype. We've heard it before--with Accomplia, with Meridia, with Xenical, with phen/fen, with Contrave, etc. Some of these diet drugs achjieved short-term sales success, but they all petered out within a year or two, not able to sustain sales over the long term, due to side effects, being pulled off the market, or the simple fact that most overweight people simply don't stay on the drug for more than 6-9 months. Weight loss has been very moderate with these drugs so far, not exacvtly what dieters want to hear.

In 1996, when the phen/fen combination came out, it was a different story. This was the first new prescription weight loss drug in a long time, so dieters flocked to their physicians and avoided structured programs that required more work, and yes, exercise. Now, the public has seen a half dozen diet drugs come and go, each with their own side effects, and they are jaded, less inclined to jump on the bandwagon.

So the next time you see an analyst projecting $1+ billion sales for a prescription diet drug, remember that the landscape is littered with wildly overoptimistic forecasts. Remember also that Wall St. analysts are salesmen, trying to justify their "buy" rating on the stock. Touting a huge potential is one way to gt you to buy.

Here's a good article that we totally agree with, by Forbes magazine:

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