Dieters have Alli in weight-loss war

NEW YORK (CNNMoney.com) -- The FDA's decision to grant over-the-counter status to GlaxoSmithKline's weight loss drug Alli could have big implications on national health, but the drug is not a miracle cure, experts said.

"[Alli] should be one of the more important over-the-counter products in history," said Gbola Amusa, analyst for Sanford C. Bernstein. "Vast pools of people in the (United) States will try it, because half the population probably wants to lose a little weight."

Alli, also known as orlistat, was approved Wednesday for over-the-counter use in 60-milligram pills, according to the Food and Drug Administration and London-based drugmaker GlaxoSmithKline (up $0.58 to $55.93, Charts). The drug has been available in the U.S. since 1999 as the 120-milligram prescription drug Xenical, produced by the Swiss drug company Roche (down $2.35 to $94.10, Charts).

Steven L. Burton, vice president of weight control for GlaxoSmithKline, called Alli a "revolutionary approach to weight loss" in a company press release.

The drug works by blocking the body's absorption of fat, which can result in the unpleasant side effect of loose stools. Nonetheless, the drug is considered safe enough to win the approval of the FDA without a doctor's supervision.

"If it's taken responsibly, or used responsibly, it can be helpful," said Angie Makris, an expert on obesity drug efficacy, registered dietician, and assistant professor at Temple University's Center for Obesity Research and Education in Philadelphia. "But consumers need to recognize its limitations and not view it as a cure, but as a weight-loss aid."

Makris said taking too much of the drug could result in gastro-intestinal side effects and deprive the body of important nutrients. She said consumers should not exceed recommended dosages and should take multi-vitamins with the drug.

Makris also said Alli will not block non-fat calories from soda and beer.

"What people really need to focus on is changing their behavior," said Makris, who recommends a healthy diet and exercise. "You can't take the drugs forever."

America clearly needs to lose some weight, considering that 30 percent of the adult population, or 60 million people, is considered obese, and 65 percent of the population is overweight, according to the Centers for Disease Control.

"We know that being overweight has many adverse consequences, including an increase in the risk of heart disease and type 2 [the most common type of] diabetes," said Douglas Throckmorton, deputy director for the FDA's Center for Drug Evaluation and Research, in an agency press release. "OTC orlistat, along with diet and exercise, may aid overweight adults who seek to lose excess weight to improve their health."

Alli sales could total several hundred million dollars a year, said Amusa of Bernstein. While this pales compared with the multi-billion-dollar prescription blockbusters that Big Pharma companies strive for, it should easily surpass the $100 million threshold of success for an OTC drug, the analyst said.

In terms of sales, GlaxoSmithKline has more to gain from prospective prescription blockbusters such as the experimental breast cancer drug Tykerb and the experimental cervical cancer vaccine Cervarix, said Amusa. The analyst estimates $1.5 billion in annual sales for each of these products by 2012. (Cervarix, if approved by the FDA, would compete with Merck's (down $0.28 to $43.98, Charts) Gardasil.)

Alli must be taken three times day - once with each meal -- which prevents it from achieving the status of once-a-day wonder drug, said Amusa.

"Going to lunch with friends and having to sneak away to take a pill undermines the daily routine," said Amusa.

The French drugmaker Sanofi-Aventis (up $0.24 to $44.37, Charts) produces a once-daily pill called Acomplia which is intended as a treatment for diabetes, though it has also been found to reduce weight, a common problem with diabetics. The drug is available in Europe and Sanofi is awaiting an FDA decision, possibly in April, to see if it can be released into the U.S. market.

Amusa does not own shares of GlaxoSmithKline stock, but Bernstein has provided non-investment banking-related for the company in the last 12 months.