Update on Orexigen's Contrave


Updates on pipeline candidates are much-awaited events in the pharma/biotech sector as they provide investors information on the current status, efficacy and safety profile of a candidate and help them to make a decision on whether to invest in a particular company or not. Pipeline updates sometimes give an insight on the potential of a candidate once it is successfully developed and commercialized.

Submission of a regulatory application for a candidate gives an idea about when to expect a decision on it. A regulatory decision generally has an impact on the price of the stock.

A couple of days back, Orexigen Therapeutics, Inc. (OREX) announced that it has resubmitted the new drug application for its obesity candidate, Contrave to the U.S. Food and Drug Administration (:FDA). The company expects the FDA to render a decision on Contrave by Jun 2014.

The regulatory application was submitted on the basis of the encouraging summary report by the independent Data Monitoring Committee on the Light Study. The interim analysis clinical study report (:CSR) will be submitted to the FDA by mid-Feb 2014.

We note that the randomized, double-blind, placebo-controlled Light Study (n = 8,900) is underway to assess the risk of major adverse cardiovascular events in overweight and obese patients treated with Contrave. The study is being conducted under the FDA’s Special Protocol Assessment program.

We remind investors that the company had received a complete response letter (CRL) from the FDA in Jan 2011 for Contrave. At the time of issuing the CRL, the FDA had expressed concerns regarding the long-term cardiovascular safety profile of Contrave and had asked Orexigen to conduct an additional study.

Orexigen has submitted a Marketing Authorisation Application to the European Medicines Agency for Contrave with a final decision expected in the second half of 2014. Orexigen expects the interim analysis data from the Light Study to equip the company to answer the Committee for Medicinal Products for Human Use Day 120 List of Questions.

Our Take

It is likely that Contrave will be approved both in the U.S. and EU given the positive data from the Light Study, This will also help Orexigen secure a lucrative partnership for Contrave in the ex-North American region in 2014.

We note that the company has a collaboration agreement with Takeda Pharmaceutical Company Limited (TKPYY) for the development and commercialization of Contrave in North America. Takeda has experience in the metabolic disorder market, which should prove to be beneficial. The companies are already preparing to launch Contrave.

However, we note that Contrave, once launched, will be a late entrant in the obesity market. Last year, two obesity drugs - Belviq and Qnexa - were approved.

Orexigen carries a Zacks Rank #3 (Hold). Actelion Ltd. (ALIOF) and Jazz Pharmaceuticals (JAZZ) are better-ranked stocks. Both carry a Zacks Rank #1 (Strong Buy).

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