UPDATE: Orexigen Reports Success In Obesity Drug Trials
July 20 2009 - 8:18AM
Dow Jones News
Orexigen Therapeutics Inc. (OREX) said its Contrave drug showed
strong results in three large late-stage studies in treating
obesity, a potential multibillion-dollar market.
The closely watched trials, including more than 4,500 patients,
met their main goal along with Food and Drug Administration
guidelines for such a drug, which wouldn't hit the market until
2011 if approved. As a result, Orexigen jumped 32% premarket.
The San Diego-based company is in a three-way race with Arena
Pharmaceuticals Inc. (ARNA) and Vivus Inc. (VVUS) to develop a new
obesity treatment. All three companies are relatively small and
will use the successful data to help find a partner, likely a large
pharmaceutical company with experience marketing to general
practice physicians.
Orexigen Chief Executive Michael Narachi expected to continue
such partnership talks, but he declined to comment on progress or a
timeline.
The company is assembling a small specialized sales force of
about 150 people that could likely bring in
"multihundred-million-dollar" sales, Narachi said, but noted that a
partnership is needed to hit a wider audience.
Under FDA guidelines for clinical trials of obesity treatments,
one of two goals must be met. A trial must show that at least 35%
of the drug group lost at least 5% of body weight, but that group
must be double the percentage of patients with similar weight loss
on the placebo. Alternatively, a study can show that patients had
an average weight loss that was at least five percentage points
higher than the placebo group's loss.
All three Contrave trials met the first guideline, with one
meeting the second guideline as well.
In early trading, Orexigen shares rose $1.80 to $7.49. The stock
had faced pressure early in the year when data from the first Phase
III trial of Contrave was generally viewed with disappointment, but
shares have rebounded ahead of latest trial and have more than
doubled in the last three months.
"I think it should be very reassuring to investors," Narachi
said. "Our clinical trial program is completed, and there is
nothing else to look at."
Also gaining premarket was rival Arena Pharmaceuticals, shares
of which rose 7.5% to $4.30. Vivus had yet to trade.
Although Orexigen has enough cash to last through Contrave's
regulatory filing in the first half of next year, Narachi said the
company would consider raising money before year-end, but he
wouldn't provide specifics.
One of the three trials tested the drug in diabetes patients,
and it showed that Contrave was effective in helping them lose
weight and showed a reduction in a measurement of blood-glucose
levels, a benefit that could be included on the drug's label.
Orexigen highlighted that Contrave had minimal side effects in
the trials, with the most common issue being mild to moderate
nausea, which was described as "transient and manageable."
The potential side effects of obesity drugs have made large
pharma companies cautious because of past disasters like the former
Wyeth (WYE) drugs, part of the notorious fen-phen combination,
which were linked to heart-valve damage and led to billions in
lawsuit settlements.
-Thomas Gryta; Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com