Shares of Orexigen Therapeutics climbed for a second day in premarket trading after regulators approved a competitor's anti-obesity drug.
Some believe the approval increases the chances for Contrave, a weight loss drug from Orexigen.
The Food and Drug Administration on Wednesday approved Arena Pharmaceutical Inc.'s anti-obesity pill Belviq, the first new prescription drug for long-term weight loss to enter the U.S. market in more than a decade.
The agency cleared the pill for adults who are obese or are overweight with at least one medical complication, such as diabetes or high cholesterol. San Diego-based Arena plans to launch the drug in early 2013.
Belviq is one of three experimental weight-loss drugs whose developers have been trying for a second time to win approval, after the FDA shot them all down in 2010 or early 2011 because of serious potential side effects.
Those include Qnexa from Mountain View, Calif.-based Vivus Inc. and Contrave from La Jolla, Calif.-based Orexigen.
Citi analyst Mark Dainty said in a Thursday morning research note the FDA decision on Qnexa increases the chances for the other drugs, including Contrave.
"This is a landmark decision in our opinion, suggestive of greater willingness on the part of regulatory agencies to approve obesity drugs despite bad historical experience," the analyst wrote.
Shares of Orexigen Therapeutics Inc. climbed nearly 9 percent, or 44 cents, to $5.36 Thursday in pre-market trading, after a 20 percent climb Wednesday. The stock has more than tripled in price since closing 2011 at $1.61
