Orexigen shares soar as long-delayed weight drug clears PhIII safety hurdle

More than two years after Orexigen Therapeutics ($OREX) began a forced march back through a $100 million Phase III study for its weight drug Contrave, the biotech is back with the news that it scored the positive interim results it needs for a return trip to the FDA. And the drug developer says it can look ahead to a potential approval as early as June 2014.

Orexigen was forced to go back to the drawing board as its rivals--Arena ($ARNA) and Vivus ($VVUS)--were eventually allowed to begin their own troubled marketing efforts for the first new weight drugs in more than a decade. Orexigen, though, found the front door at the FDA slammed shut early in 2011 as regulators demanded a pricey study to determine if the therapy triggered any dangerous heart trouble. Investigators had to recruit 10,000 patients for the Phase III safety study.

San Diego-based Orexigen's shares gyrated up 28% on the news this morning, which was also a boost for its partners at Takeda.

"The interim analysis of the Light Study clearly achieved the goal set by the FDA," said Michael Narachi, CEO of Orexigen, though the company issued no data with the release. "The resubmission will contain an unprecedented amount of cardiovascular outcomes data for an obesity therapeutic, and we are confident these data will support a favorable benefit:risk assessment for Contrave."

In a Phase III study Contrave noted that patients taking the drug were two to three times more likely to lose at least 5% or 10% of their body weight compared with those taking placebo. 

If Contrave does go on to an approval, though, it will head into a clouded market. The first new weight drugs--Arena's Belviq and Vivus's Qsymia--have been major disappointments. None of the top 10 Big Pharmas have partnered on these drugs, leaving the field to a group of Japanese companies to play in. Arena and its partners at Eisai, though, believe the tide is turning in their favor as insurers finally start offering reimbursements to members. And Orexigen asserts it has a leading therapy ready to offer, though some analysts have been skeptical that the marginal advantages on weight loss can trigger big sales.

In an interview with Forbes' Matthew Herper, Narachi also repeated earlier boasts that Takeda is the best partner for this drug, citing their willingness to unleash a sales force of 2,000 in their effort to spur market demand for their drug. That may be, but this sector of the drug-development business has been long on promises and short on performance. And that's likely to keep many investors on the sidelines.

- here's the press release

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