Among the biggest losers in Friday’s early trading are Vivus (Nasdaq: VVUS), Polycom (Nasdaq: PLCM) and Google (Nasdaq: GOOG).

FDA Denies Vivus’ Anti-Obesity Bid

Well, Vivus (Nasdaq: VVUS) knew it was playing a high-stakes game, trying to get the U.S. Food and Drug Administration (FDA) to approve its anti-obesity drug that was simply a pairing of two established drugs, each of which had safety concerns. So the company can’t be completely surprised that an advisory panel to the FDA voted against the company’s bid on Thursday evening. But some bullish investors were seemingly surprised, and they’re dumping shares today, to the tune of a -58% drubbing. Vivus plans to still lobby for the drug’s approval before a final FDA meeting in October, but its wishes are unlikely to be heeded.

#-ad_banner-#The FDA rejection should be good for Vivus’ rivals, as they would face less competition for their anti-obesity drugs — if they get FDA approval. Curiously, Arena Pharmaceuticals (Nasdaq: ARNA) is soaring +18% while Orexigen (Nasdaq: OREX) is trading down -8%. Those firms will go before the FDA advisory panels in September, and December, respectively. Orexigen’s approach is being seen as somewhat similar to Vivus’ approach, and thus is also seen as less likely to get the FDA nod. But Orexigen’s drug combo did appear to have somewhat more benign safety profiles. Meanwhile, Arena’s drug, lorcarserin, received positive comments form a respected biotech trade journal Thursday morning in terms of safety, but that drug is seen as only mildly effective.

Action to Take –> Arena has the potential to be the real winner in this space, and could garner massive royalty revenues if it gets approval and sees commercial success. But there is a chance that the FDA won’t play ball, citing limited benefits for lorcaserin. If shares rise much further, investors may want to book profits as the risk and reward will be in balance. As for Vivus, there seem to be few near-term positives to take away from this.

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Polycom’s Tepid Outlook

One of the concerns going into earnings season is that companies would post strong results but offer muted forward guidance. Intel (Nasdaq: INTC) kicked off the week with a bullish tone, but Polycom (Nasdaq: PLCM) released quarterly results Thursday evening that underscored the bear case. The company, which makes video-conferencing equipment, met second-quarter expectations but noted that backlog is dropping, a key tell on future results. Of equal concern, revenues at the company’s network infrastructure unit were below plan. Customers often need to invest in this area before buying ancillary video and audio conferencing products down the road.

Action to Take –> Polycom may also be feeling the heat from rival Cisco Systems (Nasdaq: CSCO), which is better equipped to sacrifice pricing in order to secure a broader network equipment sale. With such a fierce rival, investors might want to think twice about getting behind Polycom, unless its stock falls back toward the 52-week low of $21.

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Google Shares drop on Weaker-than-Expected Profits

Shares of tech giant Google (Nasdaq: GOOG) are shedding -5% after the company reported stronger-than-expected sales but weaker-than-expected quarterly profits on Thursday evening. The weak bottom line came from a combination of a slight uptick in the company’s tax rate, and high operating expenses. Google is pursuing so many game-changing initiatives right now that heavy spending seems warranted. The company is back on a mini hiring spree, adding 1,200 new employees in the quarter.

Search advertising revenues still account for more than 90% of sales, but help is on the way. The company is activating more than 150,000 new Android-based phones every day, which should eventually lead to surging revenues in this area as mobile advertising takes off.

Despite the weak bottom line, free cash flow was robust, and Google’s cash balance just crossed the $30 billion mark for the first time in history. With shares near a 52-week low, a stock buyback might be increasingly tempting, at least to offset the dilution coming from employee stock option grants.

Action to Take –> Wall Street has a way of flinching at higher expenses, especially if they lead to a modest pullback in near-term profit forecasts. But Google is still boosting profits at a +15% to +20% clip, and shares now trade for around 14.7 times projected 2011 profits. Could it be that the world’s fastest growing large tech company is actually becoming a bargain? The key concern for investors would be the broader perception about tech stocks in general, and not this company’s still-stellar sales execution.