Orexigen shares dented by an unexpected holdup on the FDA's weight-drug decision

Orexigen CEO Michael Narachi

Orexigen ($OREX) had to wait three long years to take a second shot at an approval for its weight drug NB32, earlier called Contrave. Now it gets to wait another three months for an FDA marketing decision as they talk through a regulatory requirement on tracking cardiovascular outcomes among people taking the therapy.

Today was D-Day at the FDA for NB32, which promises to add a third new weight drug to a market that has proven hard to crack by its two rivals. But in a release out this morning, CEO Michael Narachi said that the FDA had indicated that regulators needed more time to "reach agreement on the post-marketing obligation related to the previously agreed upon evaluation of cardiovascular outcomes for NB32. The NDA resubmission package includes interim safety and CV outcomes data from the ongoing 8,900 patient Light Study. Discussions around the package insert and other post-marketing obligations are ongoing."

No news was bad news at Orexigen, where investors had expected smooth sailing for NB32 after the positive interim results for the drug hit. Word of the unexpected delay triggered a 15% drop in the company's shares in premarket trading.

Mario Kozul, an anlyst at Leerink, noted today that he's still optimistic about the drug launch. "We remain confident in management's ability to successfully resolve rate limiting approval issues related to agreement on post-marketing obligations over evaluation of cardiovascular outcomes," he wrote. And TheStreet's Adam Feuerstein says that it could prove to be a boon.

Noted Feuerstein: "While the approval decision delay is a disappointment, it may work in Orexigen's favor if FDA allows cardiovascular outcomes data favorable to Contrave to be included in the weight loss drug's label." 

The FDA sent San Diego-based Orexigen back to the drawing board after rejecting its original marketing application in 2011, forcing the company to do a new cardiovascular safety study to prove that it wouldn't harm patients. That set of safety data, which cost an estimated $100 million to nail down, is now intended to help distinguish NB32 from rival drugs at Arena ($ARNA) and Vivus ($VVUS), which have struggled to carve out a niche for themselves in a potentially huge market.

"We are working expeditiously with the FDA to finalize the review," said Narachi. "We are encouraged by the high level of engagement with the FDA, and are confident that we can reach agreement on the remaining post-marketing obligation."

The new PDUFA date is set for September 11. Most analysts have given Orexigen good odds at gaining an approval and a decent shot at grabbing market share, with its partner Takeda fielding a sales force of some 900 reps in the U.S. 

Arena's Belviq and Vivus' Qsymia won approvals for the first new weight-loss pills in more than a decade back in 2012, but each has struggled to rack up significant sales. They are controlled substances, which seriously delayed Belviq's market entry until last June. A number of payers still won't reimburse for the drugs. The effects on weight loss are widely considered marginal among physicians. And past safety issues have left a lingering fear among prospective customers.

- here's the release

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