Orexigen shares collapse after obesity pill misses FDA standards

Los Angeles, United State, January 9: Orexigen Therapeutics Inc. released the results of a first late-stage trial of its Contrave obesity pill on Thursday. Patients, on an average, shed 9.3 percent of their weight but the result was not up to the standard required by the regulators, sending company’s shares down 34 percent.

Orexigen plunged $2 to $4.05 in after-hours trading after closing down 3 cents at $6.05 during regular trading on the Nasdaq Stock Market.

The U.S. Food and Drug Administration requires any obesity drug to produce at least 5 percent more weight loss in patients, in order to win approval. Orexigen’s drug was able to achieve the study goals of reducing body weight and improving cholesterol in a late-stage study but the difference in weight-loss between Contrave and placebo patients was only 4.2 percent, which fell short of the FDA's standard.

“The data looked good but not as good as a lot of people were expecting,” said Adam Cutler, an analyst with Cannacord Adams in New York. They just missed hitting the FDA threshold, he said.

In the recent trail, obese patients taking Contrave, lost between 20 and 25 pounds, or between 9.3 percent and 11.5 percent of their body weight, compared with placebo patients, who lost between 11 and 16 pounds, or between 5.1 percent and 7.3 percent of their body weight.

Also, 41.5 percent of Contrave patients lost more than 10 percent of their body weight. The number was not even half of this, for placebo patients.

Owing to the side effects like nausea, anxiety, headache, constipation and dizziness, Orexigen said that 26 percent of Contrave patients dropped out of the trial, which involved 793 patients. It was twice as compared with 13 percent of the placebo group.

However, the company claims that the drug proved to be quite safe and did not show any risks of depressiondefine or worsening of blood pressure.

"The results of this trial indicate that additional, clinically significant weight loss can be achieved when Contrave is added to a rigorous program of diet and exercise," Chief Medical Officer Eduardo Dunayevich said.

Graham Cooper, the chief financial officer of Orexigen said the company would pursue U.S. regulatory approval of the drug toward the end of this year.

"Side effects and tolerability are going to be critical for the FDA. We had a very clean profile," Cooper said.