Recently Orexigen Therapeutics Inc. (OREX) announced that its New Drug Application (NDA) for Contrave, the company’s candidate for treating obesity, will be scrutinized by a unit of the Metabolic and Endocrine Drug Products advisory committee of the FDA on December 7, 2010. The candidate, a combination therapy, aims to address physiological and behavioral causes of obesity.
The substantial amount of evidence gathered through the Contrave Obesity Research (COR) clinical program formed the basis of the application filed by the company in March 2010. The COR program studied more than 4,500 patients. A response from the FDA should be out in the first quarter of 2011 (action date: January 31, 2011). Even though the U.S. agency is not bound to follow the advice of its advisory committees, the recommendation of the panel is usually considered by the agency while deciding the fate of a drug candidate.
In March 2010, Orexigen and Patheon Inc. not only agreed to commercially manufacture Contrave but also develop future formulations of Orexigen products.
However, we note that Orexigen is not the only company seeking to develop a treatment for obesity. Companies like Amylin Pharmaceuticals Inc. (AMLN), Arena Pharmaceuticals (ARNA) and VIVUS Inc. (VVUS) are all striving to bring obesity treatments to market. Arena’s Lorcaserin, VIVUS’ Qnexa and Contrave work by affecting the patient’s central nervous system, thereby dampening appetite.
Recently, Amylin Pharmaceuticals and partner Takeda Pharmaceutical Co. Ltd. announced that they intend to advance their obesity combination treatment of pramlintide and metreleptin into late-stage studies.
Lucrative Obesity Market
Obesity is an attractive market that could be worth many billions of dollars. It is estimated that obesity affects over 400 million people globally. Moreover, obesity is linked to increased health risk of several medical conditions. Given the huge unmet need in this market, the successful development of the obesity pipeline would help drive growth at Orexigen.
Our Recommendation
Orexigen is a Zacks #3 Rank (‘hold’) company, which indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1-3 months. Our long-term Neutral stance on the company indicates that the stock is expected to replicate its short-term performance, but over 6-12 months. Consequently, we advise the investors to retain the stock over the time-period.
Read the full analyst report on “OREX”
Read the full analyst report on “VVUS”
Read the full analyst report on “AMLN”
Read the full analyst report on “ARNA”
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