* FDA to ask panel whether to ban Abbott’s Meridia
* Critics concerned small weight loss not worth risks
* Abbott says drug is OK for certain patients
* 2010 U.S. sales seen at $30 million — Abbott
* Outside FDA panel meets Thursday on Arena rival
By Susan Heavey and Lisa Richwine
WASHINGTON, Sept 15 (Reuters) - Amid a battle to reshape the nearly $400 million obesity drug sector, Abbott Laboratories (ABT.N) faces a critical test on Wednesday over whether its controversial diet pill should remain on the U.S. market, despite heart risks.
The U.S. Food and Drug Administration is asking an advisory panel whether to withdraw the drug, called Meridia, or allow continuing sales, perhaps with a new warning or restricted distribution.
At stake for Abbott are drug sales estimated at less than $100 million worldwide in 2010, depending on whether other countries follow the FDA’s lead. Meridia’s sales reached $340 million globally in 2008 and slipped to $311 million in 2009, according to Thomson Reuters data.
The referendum on Meridia comes as the agency weighs a new crop of rival pills that their makers and investors hope could be safer.
While the current U.S. obesity drug market is small — prescription and over-the-counter diet pills took in $381.5 million, according to data from IMS Health — there is potential with two-thirds of Americans considered overweight or obese.
So far, prescription weight-loss drugs have suffered from a shaky past that has led to withdrawals over safety concerns and lackluster sales caused by unpleasant side effects.
Abbott’s drug, approved in 1997, has faced growing calls for its removal over its potential link to heart attacks and strokes in certain patients. [nN13176388]
Although Meridia is not a major seller for the Chicago-based drugmaker, Abbott plans to defend it, saying the risks are already clearly spelled out on the label. The company expects the pill to make just $30 million in U.S. sales this year.
The FDA denied a petition in 2002 from consumer advocacy group Public Citizen to ban Meridia, saying it wanted to see key data from a European trial know as Scout. More recently, the executive director of the New England Journal of Medicine and a top FDA epidemiologist questioned whether the marginal weight loss from the drug was worth the safety risks.
Sales sank in late 2009 after Abbott submitted early results of the trial to the FDA. In January, the agency called for a new warning advising against using Meridia in patients with heart problems and European sales were halted.
Earlier this month, more results from Scout showed Meridia increased the risk of heart attack or stroke in patients with preexisting heart disease, diabetes, or both.
At the same time, some potential rivals are also struggling to get to market and have investors on edge.
In July, a separate U.S. panel of outside advisers rejected Vivus Inc’s (VVUS.O) diet pill due to concerns about side effects such as depression and potential birth defects.
Investors hoped another rival drug by Arena Pharmaceuticals Inc (ARNA.O) held promise, but a cautious critique by FDA staff released on Tuesday sent the company’s shares down nearly 40 percent. [ID:nN14247519]
On Thursday, FDA advisers will consider whether to recommend approval of Arena’s diet pill, lorcaserin. The medicine is vital to Arena, a small company with no other approved drugs.
FDA staff who analyzed lorcaserin before the meeting said it met agency criteria for proving effectiveness “by a slim margin.” But they also raised safety concerns, including cancerous tumors in lab rats given high doses. The drug would be marketed by Japan’s Eisai Co Ltd (4523.T) if approved.
Although cancer rates were not elevated in people, industry analysts said Arena may have a tough time overcoming that concern given the limited weight loss with the drug.
FDA staff concerns about Arena also dented Orexigen Therapeutics Inc OREX.O, which faces an FDA panel in December and whose shares closed more than 8 percent lower on Tuesday.
For Abbott, the FDA panel’s recommendation and whatever the agency ultimately decides is unlikely to have much overall impact on the company, which posted total net sales of $30.8 billion last year.
Abbott shares closed down 4 cents, or less than 1 percent, at $51.41 on Tuesday. (Reporting by Susan Heavey; editing by Andre Grenon)