Orexigen Fails to Win FDA Approval of Obesity Drug, Stock Crashes
Anyone who briefly thought Orexigen Therapeutics was the ray of light in a dismal world for obesity drug development will have to think again. Orexigen lost more than 70 percent of its value this morning on some devastating news from U.S. drug regulators.
San Diego-based Orexigen Therapeutics (NASDAQ: OREX) and its partner, Japan-based Takeda Pharmaceuticals, said today that they received a complete response letter from the FDA, which said the combination of bupropion and naltrexone (Contrave) couldn’t yet be approved to help people in the U.S. lose weight. But this was not a vanilla complete response letter; the agency asked for a lot more than just some double-checking on factory procedures, or fine-tuning of warning labels.
“Before your application can be approved, you must conduct a randomized, double-blind, placebo-controlled trial 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,” the agency said in the letter, according to a statement from Orexigen today.
A study like that, obviously, costs a lot more time and money than Orexigen and its investors were hoping for. Many investors had their hopes up for Orexigen, since it surprisingly won a positive recommendation for Contrave from an FDA advisory panel on December 7. We often write that the FDA usually follows the advice of its panels, although it isn’t required to do so. This is one of those cases where the FDA certainly staked out a harsher position than its own advisers.
“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, Orexigen CEO, in a statement.
About two-thirds of people in the U.S. are overweight or obese, and there’s little in the way of prescription medicines that are widely used to treat this condition that leads to a wide array of other illnesses. The field has been plagued by notorious setbacks for years, including drugs that were linked to damaged heart valves and suicidal thinking. Other companies that have spent years developing new medicines—including San Diego-based Arena Pharmaceuticals (NASDAQ: ARNA) and Mountain View, CA-based Vivus (NASDAQ: VVUS) have also seen their applications shot down by the FDA in the past year.
Orexigen shares fell 72 percent to $2.49 in pre-market trading.