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COMMENT
Scientists in Wisconsin said yesterday that obesity may not be caused by over-eating and lack of exercise alone. Apparently a virus called Ad-37 may also be a contributory factor. So if you want to lose weight, wash your hands! Or maybe not. I'm a little sceptical about Ad-37, but I'm not at all sceptical about obesity's investment potential. Datamonitor has forecast that the global obesity market could be worth $2.5bn by 2012; I think that figure could prove to be conservative. So who might benefit from the obesity boom? One of the best known products is a new drug called Acomplia, which has been developed by French drugs giant Sanofi-Aventis. Acomplia is a "reverse munchies" drug which acts on the cannabinoid receptors in the brain. Marijuana acts on those receptors to induce a feeling of hunger; Acomplia creates the opposite effect via the same receptors. Sanofi is waiting for the final thumb-up from the US Food and Drugs Administration for Acomplia and hopes to launch the drug this year. Acomplia could be a big money-spinner, but there are drawbacks. Clinical trials suggest that Acomplia is only effective for around a year and there were also signs of increased depression and anxiety in trialists. UK biotech Vernalis (LSE: VER) is developing a similar drug to Acomplia, but it's still at an early stage. Trials in humans are expected to start later this year. Another UK biotech, Alizyme (LSE: AZM) is working on a more advanced obesity drug called Cetilistat. It works by reducing the absorption of fat in the gut. Cetilistat is similar to Roche's drug Xenical which is already on the market. Roche had high hopes for Xenical when it was launched, but sales have disappointed because the side effects -- euphemistically known as "anal leakage" -- are so unpleasant. Cetilistat appears to offer the same efficacy as Xenical but its side effect profile is better. Cetilistat is now poised to enter late stage Phase III trials, and Alizyme may sign a licensing deal with a larger company in 2006. If that happens, the shares should move up from today's price of 139.5p. Another small UK company, Phytopharm (LSE: PYM) has developed a slimming product called P57. Like Acomplia, it stimulates a feeling of satiety in the brain. P57 was originally developed as a pharmaceutical drug, but the new plan is to market it as a food supplement. The product has been licensed to Unilever (LSE: ULVR) who may add it to meal replacement products such as Slimfast milk shakes. However, P57 has to get through two clinical trials before market launch, so P57 products may never reach supermarket shelves. In this article, I've concentrated on European obesity products. Needless to say, plenty of US companies are working in this area. Read more about the leading US products in this article from Fool.com. As for the UK companies, bear in mind that Vernalis, Phytopharm and Alizyme are all small firms with relatively thin product pipelines. That means they are all high-risk investments and are definitely not for widows and orphans. Still, whether it's based in the US or Europe, I'm pretty sure that at least one company will make fat profits from obesity in the next decade. Ed owns shares in Phytopharm and Alizyme
