HOT Biotech Alert – FDA Panel Approval sends Orexigen Therapeutics Shares Soaring
  • Orexigen Therapeutics Plunges on FDA’s Response for Contrave® NDA
  • Vivus rebounds on Narrowing Loss and Qnexa Resubmission
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    Biotech Buzz: Need for Weight Loss Drugs Raises Chances of Contrave Approval

    Shares of Orexigen Therapeutics Inc. (Nasdaq: OREX ) nearly doubled on December 7 trading session reaching $8.77 once the U.S. Food and Drug Administration panel proposed for approval the company’s weight loss drug Contrave, making it the first in a group of contenders to get a positive reference over the last 10 years. Since the FDA panel recommendation, OREX shares went up and down and closed at $8.80 on December 15.

    Contrave’s potential is exciting, largely due to the limited range of options available to the growing number of overweight and obese people in the United States. Dieting and exercise, the first lines of prescription for weight loss, often prove too difficult for patients to follow over time. The benefits of surgical options, such as gastric banding and bariatric surgery, are usually canceled by greater expense and risk.

    The prospects for obesity drugs looked gloomy after the failure of two diet drugs, Vivus Inc.’s (Nasdaq: VVUS) Qnexa and Arena Pharmaceuticals’ (Nasdaq: ARNA) lorcaserin,  to get FDA clearance due to safety concerns and the withdrawal from the market of Meridia (sibutramine) from Abbot Laboratories last October due to side effects concerns. Currently, Orlistat, marketed under the trade name Xenical by Roche, or over-the-counter as Alli by GlaxoSmithKline, is the only one prescription drug treating obesity still approved. However, it turned out to be ill tolerated by some patient.

    Contrave is a combination pill, mixing two generic drugs: the antidepressant bupropion with the anti-addiction drug naltrexone. OREX’s studies showed that patients taking Contrave, on average, lost 4.2% more weight than patients taking a placebo. The drug has also proved that at least 35% of patients, twice the proportion of those on the placebo, lost at least 5% of their weight. The FDA is expected to issue a final decision on Contrave by January 31.

    Contrave addresses a huge market. The National Health and Nutrition Examination Survey estimated that approximately 68% of the U.S. adults are overweight, raising their risk of diabetes, heart disease, high blood pressure and cancer. U.S. obesity rates, measured as a ratio between height and weight, are near 35% among adults, making the new weight-loss therapies highly desired.

    The huge market and the lack of other drugs to properly address the obesity issues significantly raise the odds that the FDA would approve Contrave by January 31. The analyst consensus calls for a blockbuster potential of Contrave, if approved, with annual sales estimates ranging between $1.2-1.8 billion within the next five years.

    Accordingly, OREX shares may continue going up and down until January 31, however, it could skyrocket following the FDA approval.

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