Shares of weight-loss drug makers Vivus Inc (VVUS.O) and Orexigen Therapeutics Inc (OREX.O) fell ahead of an anticipated deadline by the end of Tuesday for the U.S. Food and Drug Administration to decide on approval of Vivus's diet drug Qnexa.
The stock of both companies has seen heavy, volatile trade in the days leading up to the decision on the second of three new drugs aimed at tackling America's obesity epidemic.
The FDA last month approved a rival obesity drug called Belviq from Arena Pharmaceuticals Inc (ARNA.O), making it the first prescription weight-loss pill to receive U.S. approval in over 13 years.
Share of Vivus fell 9.8 percent to $25.90 in early trading on the Nasdaq. They recouped most of those losses midday after a USA Today story appeared online saying the drug had been approved. The story quoted Vivus President Peter Tam saying it would be available to consumers later this year.
The story was removed from USA Today's website about an hour later and replaced by a statement that the story had been prepared "in anticipation of FDA approval, but at this hour that approval is still pending." Vivus shares traded down 2.9 percent.
"The timing of the USA today report fits with (Vivus shares) recovering that 10 percent briefly," said Jonathan Aschoff, analyst with Brean Murray Carret & Co.
FDA officials were not immediately available for comment. Vivus declined comment.
Shares of Orexigen were down 2.4 percent in mid-afternoon trading to $7.22, while Arena fell 3.1 percent to $10.77.
(Reporting By Debra Sherman; Additional reporting by Bill Berkrot and Anna Yukhananov; Editing by Gerald E. McCormick and Tim Dobbyn)