There's no denying that obesity is a disease and an epidemic that's straining the U.S. health-care system and shortening our life spans.
According to the Centers for Disease Control and Prevention, 35.7% of all U.S. adults are considered obese (having a Body Mass Index of 30 or higher) with nearly two-thirds of adults cumulatively considered overweight or obese based on the BMI calculation. Furthermore, obesity accounts for approximately $190 billion, or 21%, of all health related expenditures in this country in a given year.
You may not think this is a problem, but the complications of carrying around extra weight over a long period of time can lead to a number of serious complications. In June, we took a look at five of the most common diseases caused by being obese: cancer, stroke, nonalcoholic fatty liver disease, cardiovascular diseases (e.g., heart disease or heart attack), and type 2 diabetes. These are diseases that, if left untreated, could eventually impair or even kill you.
How we're fighting obesity
We understand that obesity is a problem; we just don't really know what the best method is for tackling it.
One factor that has helped at least curb a worsening in obesity -- especially among children -- is increased awareness of the negative health effects of the condition. The CDC has campaigned hard to raise awareness, and public schools in a number of states have enacted initiatives to remove sugar drinks or added an extra tax to sugary drinks in schools. Unfortunately, staying the course isn't a viable plan, either. We need to reverse obesity trends, and it needs to be done soon.
There are really two methods of losing weight that gain the most attention. There's the tried-and-true method of eating the right foods, dieting, and getting plenty of exercise. It's relatively inexpensive compared to the alternative I'll discuss in a moment, and it likely costs more in a person's time and commitment than in actual money.
The other weight-loss method is some form of gastric surgery such as gastric banding, gastric bypass, or sleeve gastrectomy. While quick and often effective, these surgeries are very pricey, with my own Internet research turning up a cost of between $20,000 and $30,000 assuming your insurance company doesn't cover a dime. That may change now that obesity is officially a disease, but it's still safe to say that some insurers consider gastric weight-loss surgeries an elective, and therefore uncovered, procedure.
Which weight loss method works better?
So, which is the more preferred method to lose weight? A recent meta-analysis (i.e., combination of a number of studies) published last week in the British Medical Journal may have answered that question once and for all.
According to the meta-analysis' findings involving 796 obese people across 11 different studies, gastric surgery proved a more effective weight-loss tool than diet and exercise alone. The findings showed that gastric surgery led to average weight loss after two years of 57 pounds in obese patients, as well as a remission in type 2 diabetes for select patients. Obviously, there was some potential downside to the surgical option, which included iron deficiency anemia and the possibility of needing to reoperate, but the results handily favored this method as opposed to diet and exercise by themselves if you want to see results.
In years past, Allergan would be the go-to name if you wanted to take advantage of the benefits of gastric surgery as an investor. However, sales of its Lap-Band gastric device peaked in 2008 and have fallen ever since, hurt mainly by safety concerns and the recession, which pinched consumers' pocketbooks. In fact, Allergan noted in yesterday's earnings release that it had sold its obesity business for $75 million in cash to privately held Apollo Endosurgery, leaving few ways for investors to play the medical device obesity market.
A hidden opportunity
Perhaps the most intriguing option lies somewhere in between surgery and diet and exercise. Surgery is producing greater weight-loss results, but the complications from a procedure and the hefty costs do weigh on patients' minds. Similarly, dieting and exercise are relatively inexpensive compared to the alternative, but they sometimes aren't enough to deliver the desired results.
This brings us to the obesity drug three-way fight between VIVUS' Qsymia, Arena Pharmaceuticals' Belviq, and Orexigen Therapeutics' experimental therapy Contrave.
Certain drugs could deliver the perfect balance by giving proper diet and exercise the extra kick they need to cause obese patients to lose extra pounds while offering a dramatically cheaper alternative to a $25,000 surgery. Each drug offers its own unique efficacy and safety aspects that make it a potentially appealing investment and adjuvant treatment for diet and exercise.
VIVUS' Qsymia delivered superior weight-loss results relative to Arena's Belviq in the two late-stage trials that led to its approval by the Food and Drug Administration. In those trials, Qsymia delivered average weight loss of 6.7% and 8.9% (the higher dosage), with 62% and 69% of patients, respectively, losing at least 5 pounds over the course of a year. Qsymia has also been on pharmacy shelves longer than Belviq.
Belviq brings to the table a much more palatable safety profile than Qsymia despite being outdone in total body weight lost when the drugs go head-to-head. For Belviq, 47% of obese patients without type 2 diabetes lost at least 5% of their weight while 38% could say the same if they did have type 2 diabetes. Both results essentially doubled the effective weight loss of the placebo.
Arena shareholders also had quite the wait on their hands as Belviq's scheduling by the Drug Enforcement Administration took longer than expected, but it also has the secret weapon of an experienced global marketing partner in Tokyo-based Eisai with whom it splits a portion of Belviq sales. The downside, of course, is that a company like VIVUS gets to keep 100% of Qsymia revenue for itself while Arena is splitting its sales. Conversely, all marketing costs here are shared whereas VIVUS has had to handle the launch and marketing expenses on its own.
Finally, there's the potential dark horse in Orexigen Therapeutics with its experimental weight management control drug Contrave. Orexigen's drug met its primary endpoint of achieving 5% weight loss in a minimum percentage of patients in four separate trials; it is nearing the release of its Light Study data, which involves a cardiovascular safety study involving more than 10,000 people.
With an efficacy that appears to be right in between that of Qsymia and Belviq, Contrave might not seem like the candidate to emerge from the pack, but it's also the only one that appears to have the clearest path to European approval. Qsymia (known as Qsiva in the European Union) was sent packing from the EU while Arena pulled its marketing authorization application when it knew Belviq wasn't going to be approved. Why is this important? Because physicians in the U.S. just might look to the EU for safety guidance when it comes to prescribing weight-control meds. If Contrave gets approved in the EU, and eventually in the U.S., it may represent the best overall safety and efficacy profile of the three treatments.
Clearly, obesity is a disease that needs our attention sooner rather than later. The evidence points to surgery as the option that's going to deliver better weight-loss results, but surgery is not a viable option for all obese Americans from a cost perspective. That's where weight-control medications which are significantly cheaper than surgery and work in conjunction with diet and exercise could come in handy -- and be a benefit to both obese Americans and investors.
It may not look like it now, but this is a disease that's only going to get more attention as the decade wears on. I'd suggest keeping a close eye on these three companies and obesity-fighting developments going forward.
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The article A New Obesity Study Reveals a Golden Opportunity for Investors originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong . Try any of our Foolish newsletter services free for 30 days . We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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