Vivus recently reported that its late stage trial of obesity drug Onexa resulted in an almost 15 percent loss of body weight and a trial in diabetics resulted in a more than 13 percent loss. On the day of the announcements, the stock nearly doubled, as excitement over this promising treatment for obesity caused investors to pile into the stock. This pushed the company's market cap up near $900 million.

The trial lasted one year. Obese patients lost an average of 37 pounds, while patients with weight associated problems like diabetes lost an average of 30 pounds. The weight loss also resulted in reduction of hypertension, and diabetes. It also increased good cholesterol and decreased bad cholesterol. With America's obesity epidemic in full swing, any drug that promises to help people lose weight will have a huge potential market. Vivus is now planning to enter discussions for partnering with a major drug company for a distribution partnership.

Vivus also sells MUSE, a novel therapy for erectile dysfunction. It also has another erectile dysfunction treatment in the pipeline, and has completed a phase 2 study for a drug that treats hypoactive sexual desire disorder in women. Clearly, this company's stock is one to watch.