Orexigen slashes staff as it ponders an uncertain future

Confronted by an FDA demand that it run a long and pricey cardiovascular study ahead of any formal decision on its application to market a new obesity treatment, Orexigen Therapeutics ($OREX) has started to bunker down, laying off 23 staffers--40 percent of the biotech's employees--as it tries to map its next steps.

"We continue to believe in the potential of Contrave and look forward to discussions with the FDA," said Mike Narachi, Orexigen CEO. "Unfortunately, given the near term uncertainty of Contrave approval, we felt it prudent to consolidate and focus our resources."

Actually, there's very little near term uncertainty about Contrave's approval prospects. The FDA ignored an expert panel's endorsement of the weight drug when the agency recently rejected the marketing application, confounding the San Diego-based biotech with a trial requirement that analysts estimate could take anywhere from one to two years to complete at a cost of $100 million to $200 million. While partnered on the program, Orexigen is on the hook for all trial expenses, spurring considerable speculation about its ability to fund that kind of work.

The FDA's decision, one in a series of actions that has put the entire field of obesity drug research under a cloud, has spurred some considerable soul searching among researchers trying to fashion a new development strategy that could work with regulators. The San Diego Union-Tribune notes that developers could try to develop treatments that work for smaller, carefully focused patient populations. Others suggest shifting away from the psychological approach toward metabolic pathways. No matter what, though, analysts say that the idea of taking a mass-market weight drug to the FDA with a minimal amount of safety data simply won't fly.

"The FDA has been really clear," said 3D Communications' Jim DiBiasi. "It's all about safety. When companies come to the market with one year of (clinical trial data), the FDA says that's not enough."

- see the Orexigen release
- here's the article from the San Diego Union-Tribune

Special Report: Obesity drugs: Where are we now?