The FDA extended its review of NB32 (“Contrave”), Orexigen’s weight loss drug so the two parties can work out an agreement on post-marketing obligations related to evaluating the drug’s effect on the heart. This FDA extension caught the market by surprise as a binary event was expected. As a result, OREX shares have dropped more than 15%.
The resubmission package to the FDA would include interim safety data and cardiovascular results from the ongoing Light Study with 8900 patients. If included in the label, this set of safety data can distinguish Orexigen from rivals Arena (ARNA) and Vivus (VVUS), who already have weight loss drugs marketed but have failed to see significant sales traction.
Already trailing competitors in the market, this regulatory delay will halt Orexigen operation while Arena and Vivus move forward. Just recently, Arena’s marketing partner, Eisai, announced it would add an additional 200 sales representatives, bringing the total to 600. These advancements, though small, are contributing to greater adoption of the already approved drugs which puts Contrave at a disadvantage.
Orexigen’s is expected to be reviewed Sept 11, leaving the company with little actionable news until then. Management guided a late July timeline for a European marketing authorization response, which would put the company on track to receive an opinion from the Committee for Medicinal Products for Human Use (CHMP) 2H 2014. If FDA gives the green light during their rescheduled fall meeting, Contrave launch is expected late 2014.
A delay is better than a rejection. Keryx and MannKind both faced similar decision from the FDA and recovered. Today’s news makes Orexigen an interesting name to keep on the watch list.