The Long Wait for This Obesity Drug Is Almost Over

It's been a long road, but Eisai and Arena Pharmaceuticals' (NASDAQ: ARNA  ) obesity drug Belviq can finally launch in 30 days. The Drug Enforcement Agency has made its final ruling, assigning a Schedule IV controlled substance designation to the drug.

That's the same recommendation that the Food and Drug Administration made when it approved the drug last June.

It's the same designation Arena said after the approval that it thought it would get in the beginning of this year, based on the typical amount of time it takes for the DEA to issue its rulings.

It's the same designation that the DEA proposed back in December, requesting comments through mid-January.

Nearly a year after the FDA originally approved the drug, the DEA has at last made its final ruling, supporting all of previous recommendations. But the ruling doesn't go into effect for another 30 days, so patients will have to wait until then to get the drug.

A Schedule IV is pretty mild in the classifications for potential abuse. It requires drugmakers to do a little extra paperwork to track where the drugs go, but generally won't affect how the drug is sold.

Belviq's direct competitor, Qsymia from VIVUS (NASDAQ: VVUS  ) , has the same Schedule IV designation. Qsymia was actually approved after Belviq, but VIVUS was able to launch earlier because Qsymia inherited its Schedule IV designation from Johnson & Johnson's (NYSE: JNJ  ) migraine and seizure medication Topamax, which contains the same active ingredient. Before it went generic, annual sales of Topamax peaked at $2.7 billion, highlighting the blockbuster potential for drugs with Schedule IV designations.

Investors have had a long wait -- longer if you include the first rejection -- to see if Belviq can become a blockbuster. They can finally start their 30-day party.

So can the shorts for that matter. For their investment thesis to come to fruition, Belviq has to have lackluster sales. It's a little hard to prove that a drug can't sell well when it isn't even on the market.

As I've said in the past, I don't think the long wait is necessarily the worst thing for the long-term sales of Belviq. VIVUS has done a lot of the ground work, preaching to doctors about the health benefits of losing weight, which will only help Eisai's sales force when it hits the ground. The waiting period also gave Eisai time to work out reimbursement with some insurers, which should make the launch go smoother.

Who will win the obesity drug market?
Can VIVUS pick up its lagging sales and fend off the competition, or will Arena Pharmaceuticals reign supreme in the obesity space? If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to stay up to date. Our senior biotech analyst gives investors the must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at Arena and VIVUS -- complete with a full year of free updates -- today.