By any standards, Nastech's deal to develop a new obesity drug with Merck was a rich one: $5 million in an upfront payment to co-develop an experimental new treatment; $131 million in potential milestone payments as the drug progresses along the pipeline, and millions more in possible royalties for a successful market launch. But the discovery pact - announced last September - is peanuts compared to the money that could be made with an FDA-approved obesity treatment. Nastech's niche, a PYY hormone copy, is worth a potential $5 billion, according to the company. And the Seattle biotech has been joined by a host of drug discovery outfits and major pharmaceutical companies intent on cashing in on what portends to be a sizeable new branch of pharmaceuticals. Among the hottest prospects: Sanofi-Aventis' rimonabant, which will soon be reviewed by the FDA; Regeneron Pharmaceuticals' Axokine, an appetite suppressant; Alizyme's ATL-962, which blocks fat absorption; and Ortho-McNeil Pharmaceutical's Topamax. "I think this is a very large market," says Quynh Pham, an analyst at Delafield Hambrecht. "The drugs that are out there are really not very good." At the same time, obesity in America has hit epidemic proportions, with an ever-growing majority of adults - and larger numbers of children - adding weight in what many medical experts refer to as a burgeoning health crisis. Adding an FDA-approved drug to that mix is likely to quickly find a multibillion-dollar market. But it won't be easy. Nastech's new obesity drug, for example, still faces some enormous investigatory hurdles. The drug has just finished Phase I safety trials and the FDA is going to expect any Phase II or III trials on efficacy to include a wide selection of patients with follow-up studies to determine any lingering side effects that may pop up. In the past, drugs aimed at cutting the waistline were linked with severe cardiovascular problems and the agency is likely to be sensitive to that history as they start pondering approvals for a new generation of weight drugs. But pharmaceutical companies have been pressing the FDA to review the way it approves weight drugs, arguing that the two-thirds of the population that is overweight stands to see major health benefits that would outweigh some of the risks of swifter approvals. Critics of any change in standards, including Public Citizen, note decades of controversy and lawsuits over discredited "miracle" drugs like fen-phen. But Pham notes that the old drugs simply tried to block the way the body absorbed fat. These new drugs in trials today target receptors in the body that regulate the amount of food we crave. "At least in the 15 years that have passed in research, there certainly are more protein players and hormone players. It's not a fat pathway. The way your body metabolizes food and sequesters fat turns out to be a very complex process." One of the most advanced new obesity drugs drawing scrutiny is Sanofi-Aventis' rimonabant, which targets a cannaboid receptor in the body. That's the receptor in the body that tells marijuana smokers it's time to start eating. Researchers believe that controlling the receptor with a drug can also stop that message from going out to the brains of obese patients, acting as an appetite suppressant. Sanofi has already hired a sales force of 4,400 to market the drug in the U.S. and plans to seek FDA approval next year. And the world's third largest pharmaceutical company clearly expects major rewards for its work in the field - estimating annual revenue in the billions. But Pham cautions against waiting for the day when a pill will magically slim the population, automatically reducing rates of heart disease and Type 2 diabetes. "I personally don't believe there's a silver bullet in this process," says Pham, who's careful to note that she holds no stock in Nastech but allows that her company may seek investment banking business from it at some point. "I haven't seen one miracle drug. You really have to take drugs in combination with more healthy eating and lifestyle changes." But that prospect leads many to believe that the day is approaching when obese patients will be treated with a variety of drugs and advice on lifestyle changes - making obesity another lucrative chronic disease that will gin big sales for years to come.