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