All day yesterday shares of Orexigen climbed steadily higher as analysts lined up to predict that regulators would line up behind an expert panel's decision and pave the way to an approval for the weight drug Contrave this year. That illusion--and Orexigen's ($OREX) share price--came crashing down this morning the second the biotech announced that the FDA had rejected its application and demanded a pre-approval cardiovascular study before it rules on an approval.
It won't be cheap or quick. Regulators told the developer that its trial would need to be of "sufficient size and duration to demonstrate that the risk of major adverse cardiovascular events in overweight and obese subjects treated with naltrexone/bupropion does not adversely affect the drug's benefit-risk profile."
Within seconds the Twitterverse lit up with dire predictions for the company as well as Arena and Vivus, which had competed to gain the first approval on a new weight drug in more than a decade. Investors caught on quickly, sending Orexigen shares crashing down 60 percent within minutes.
"The field of obesity drugs is effectively dead," ruled Forbes' Matthew Herper. The FDA's trial demands would take years to satisfy and cost a fortune, he added, which will probably kill the drug program--along with all other similar drugs. "The clear lesson is that weight-loss medicines simply do not have enough of a benefit to justify any risk--and that this makes getting them approved just about impossible."
Orexigen and its partner, Takeda, aren't quite ready to throw in the towel.
"We are surprised and extremely disappointed with the Agency's request in light of the extensive discussion and resulting vote on this topic at the December 7 Advisory Committee meeting," said Michael Narachi, president and CEO of Orexigen. "We plan to work closely with the Agency to gain more information to determine the appropriate next steps regarding the Contrave application."
- here's the Orexigen release
- here's the column from Forbes
Report: Orexigen's Contrave: An obesity drug timeline