BANGALORE – Obesity's new-found status as a disease is pushing many small drugmakers to develop treatments and grab a slice of a huge untapped market with enough room for several drugs, each of which could bring in annual sales of more than $1 billion.

“Over the last several years, there has been more and more of a shift in public thinking towards obesity as not simply a failure of will or character, but also as a disease,” Robins Group analyst Ruthanne Roussel said.

In spite of some high-profile failures, a number of weight-loss drugs are in advanced stages of development, such as Orexigen Therapeutics Inc's Contrave and Empatic, Vivus Inc's Qnexa and Arena Pharmaceuticals Inc's lorcaserin – all with the potential to become a blockbuster.

“Because each patient is a little different, some drugs work better for some patients than others. So I can see this market being very fruitful for a number of competitors,” Cowen and Co analyst Phil Nadeau said.

And the number of potential patients is significant. By 2015 about 2.3 billion adults worldwide will be overweight and more than 700 million will be obese, according to the World Health Organization.

Currently the marketplace has only a few drugs, such as Abbot Laboratories Inc's Meridia, Roche Holding SA's Xenical and generic phentermine, which are prescribed for obesity. But their benefits are often overridden by a slew of possible side effects.

“There are things that are out there but it seems like it should be possible to get a product on the market that combines and improves on what's out there,” Robins Group's Roussel said.

But history does not favor drugs targeting obesity.

Wyeth's notorious fen-phen, linked to deadly side effects, cost the company billions in legal costs after it was withdrawn in 1997.

Both Pfizer Inc and Merck & Co have ended development of their respective obesity drugs. These sought to work by blocking cannabinoid receptors in the brain – the same receptors that make people hungry when smoking marijuana.

These drugs were in the same class as Sanofi-Aventis' rimonabant, which is yet to clear regulatory hurdles in the United States due to concerns about its psychiatric side effects, including depression.

Given the failures surrounding drugs targeting cannabinoid receptors, Orexigen, Vivus and Arena are trying a different approach.

These companies' drugs stimulate the part of the brain that controls appetite and metabolism, to reduce hunger while increasing energy expenditure.

“We think that (Orexigen's) Contrave has the highest chance of successful approval of any of the current late-stage obesity therapies, given its safety and efficacy profile,” Canaccord Adams analyst Adam Cutler said in August.

The drug is a combination of anti-depressant bupropion and naltrexone, which is used to treat various addictive disorders.

“(Naltrexone) has been shown to make foods, particularly sweet foods, taste less palatable and pleasurable... Naltrexone appears to best complement bupropion by blocking metabolic compensation mechanisms that prevent sustained weight loss,” Cutler said.

The approval of drugs being developed by Orexigen, Vivus and Arena may draw the attention of bigger companies that have failed in their pursuit of a weight-loss drug.

“I think that it is certainly logical that a promising obesity drug has a lot of what big pharma is looking for,” Canaccord Adams' Cutler said.

A good weight-loss treatment has blockbuster potential, some synergy with other large therapeutic categories and a fair amount of overlap with cardiovascular and diabetes drugs, he said.

(Editing by Pratish Narayanan)