Can Orexigen Therapeutics' ($OREX) diet drug Contrave survive the FDA's advisory panel review process? Analysts have been pondering that question now that the FDA is scheduled to release staff comments on Friday, ahead of the Tuesday expert panel meeting. And they've come up with a mixed set of responses.
"I don't give it a lot of hope that it will get a positive recommendation," Washington Analysis Corp's Ira Loss told Reuters. But Jefferies & Co analyst Corey Davis says the biotech "is our top small cap pick right now for investors willing to stomach" the anxiety.
Orexigen is treading on dangerous ground, as Arena Pharmaceuticals ($ARNA) and Vivus ($VVUS) learned first hand in recent months. The experts have had little stomach for any signs of risk associated with obesity drugs and have looked askance at short-term safety studies. And Contrave, a combo treatment that mixes the addiction drug naltrexone with the antidepressant buproprion, has all the risks that are already known for each, including suicidal behavior and seizures.
"Safety and more safety will be the theme of the day," notes TheStreet's Adam Feuerstein. "Expect a lot of inquiry about elevated blood pressure, heart rate and an increased risk for seizures--known side effects of bupropion."
But as J.P. Morgan noted earlier, going last among the competition gives Orexigen an added advantage. It knows what questions are coming and has had time to prepare.