By Susan Heavey

WASHINGTON - The first potential new prescription weight-loss pill in more than a decade helps people shed pounds, U.S. health regulatory staff said, but they are still concerned about potential safety issues.

Analysts largely shrugged off the Food and Drug Administration's concerns, and shares of Qnexa maker Vivus Inc jumped more than 15 percent on Tuesday after the agency's staff said the experimental drug appeared to work.

JPMorgan analysts, echoing others, said in a research note that the FDA staff's assessment was "far more benign than most were expecting" and therefore was likely to boost Vivus shares.

On Thursday, an FDA panel of outside experts will discuss the safety issues and offer advice on whether to approve Qnexa. The agency will then make the final approval decision, which Vivus expects by October 28.

The biotechnology company wants to market the once-a-day pill for use with diet and exercise. If approved, it would be the first new U.S. prescription weight-loss drug in more than 10 years.

Anticipation of a potential new obesity drug in a nation where more than two-thirds of the people are overweight has rocked the drugmaker's shares for more than a year as anxious investors anticipate the FDA's decision.

Shares of Mountain View, California-based Vivus, which had more than doubled over the past year, were up 15.3 percent at $12.28 in morning trading.

All three doses of the drug were "efficacious for weight loss," FDA staff reviewers said. But they added that there are five areas of safety concerns, including the effect on pregnant women and psychiatric side effects such as depression.

Attention span, memory and language problems as well as increased heart rate in Qnexa patients are also potential safety issues, the staff said in documents posted on the FDA's website. The potential for increased body acids was also a concern.

The body acid issue was not especially surprising, the JPMorgan analysts added. They said they were not particularly concerned about the slight increase in heart rate, given the drug's "significant improvements" of other related cardiovascular measures such as blood pressure.

But Favus Institutional Research LLC analyst Elliot Favus said the FDA's documents were "just a laundry list of safety concerns," adding that the staff's assessment of Qnexa "is probably not sufficient for approval."

Vivus is trying to improve on the notorious "fen-phen" diet drug by combining one of its ingredients -- the appetite suppressant phentermine -- with the anti-seizure drug topiramate. Fen-phen's other ingredient, fenfluramine, was pulled from the market after being linked to serious heart valve problems.

The sales potential is huge: 68 percent of U.S. adults are overweight or obese, according to government statistics. So far, however, options that offer modest weight loss but some unpleasant side effects have left the market untapped.

Current prescription and over-the-counter weight-loss products took in just $381.5 million in 2009, according to data from IMS Health.

If Vivus' Qnexa wins the FDA's seal of approval, analysts estimate it could take in nearly $689 million in sales by 2014, according to consensus forecast data from Thomson Reuters. The biotech's current market cap is $931.5 million.

FDA and its advisers' action of Vivus' drug could also signal what's ahead for Arena Pharmaceuticals and Orexigen Therapeutics, two other obesity pill makers that have rival products up for U.S. review later this year.

Arena shares were up 9 percent, while Orexigen rose 17.1 percent.

Currently available prescription diet pills include Abbott Laboratories' Meridia, which carries warnings about high blood pressure and a risk of heart attack and stroke in some patients, and Roche Holding AG's Xenical, which can cause serious liver problems, uncontrolled bowel movements and gas.

Vivus' ability to make its case to the FDA and its advisers is also a test for the biotechnology company and its chief executive officer, Leland Wilson. If approved, Qnexa would be the second U.S. drug for the company, which already sells an erectile dysfunction drug called Muse and is working on another known generically as avanafil.

Vivus is also studying other potential products for diabetes and sleep apnea.