Orexigen Therapeutics, Inc.’s (OREX) shares fell more than 30% following the outcome of a meeting with the US Food and Drug Administration’s (FDA) Division of Metabolic and Endocrinologic Products (DMEP) regarding the company’s New Drug Application for Contrave. Orexigen is looking to gain approval for Contrave for the treatment of obesity, including weight loss and maintenance of weight loss. The company has a collaboration agreement with Takeda for the development and commercialization of Contrave in the US, Canada and Mexico.
Second Blow for Contrave in 2011
Earlier this year, Orexigen had received a Complete Response letter (CRL) from the FDA for Contrave. The FDA had expressed concerns regarding the long-term cardiovascular safety profile of Contrave and asked Orexigen to conduct an additional study. The FDA had requested a randomized, double-blind, placebo-controlled trial of sufficient size and duration which would show that the risk of major adverse cardiovascular events in overweight and obese subjects treated with Contrave does not adversely affect its benefit-risk profile.
Orexigen met with the agency recently to discuss the CRL. The company submitted a proposal for the proposed outcomes study and also put in a request for approval of a narrower indication (for patients with lower cardiovascular risk) until data from the proposed outcomes trial is reviewed for label expansion.
Both proposals were shot down by the DMEP which said that the proposed study would be inadequate. The DMEP instead asked for a pre-approval cardiovascular outcomes trial and said that it would need to review data from a cardiovascular outcomes trial before granting approval for a narrower indication.
The study suggested by the DMEP would require 60,000-1,00,000 patients to be enrolled instead of the 12,000-15,000 patients that Orexigen was looking to enroll.
Moreover, the DMEP said that it plans to hold a general advisory committee meeting in early 2012 to discuss the cardiovascular assessment for obesity drugs. At that time, the DMEP could suggest a change in the design of Orexigen’s cardiovascular outcomes trial based on its interpretation of the input received from the 2012 advisory committee meeting.
Orexigen to Appeal DMEP Response
Orexigen intends to appeal the DMEP’s response. Moreover, given the uncertainty surrounding the study design, Orexigen has decided to put on hold its plans for its obesity pipeline until it gains further clarity on the US regulatory path. In the meantime, the company intends to evaluate opportunities for its candidates in ex-US markets.
Neutral on Orexigen
We currently have a Neutral recommendation on Orexigen which carries a Zacks #3 Rank (short-term Hold rating). The outcome of the meeting with the DMEP is a major disappointment for the company. Other companies that are working on gaining approval for their obesity candidates include Arena Pharmaceuticals Inc. (ARNA) and Vivus Inc. (VVUS).
ARENA PHARMA (ARNA): Free Stock Analysis Report
OREXIGEN THERAP (OREX): Free Stock Analysis Report
VIVUS INC (VVUS): Free Stock Analysis Report
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