UPDATE 2-Orexigen stops two mid-stage trials; shares sink

(Adds analysts' comments, updates share movement)

By Anand Basu

Dec 5 (Reuters) - Orexigen Therapeutics Inc (OREX.O) said it would stop mid-stage studies of two drug candidates to conserve cash for its late-stage obesity programs, sending shares down 71 percent to a lifetime low.

Orexigen's obesity candidates, Contrave and Empatic, are currently in late-stage studies, and the company expects to announce the results for Contrave in January.

Canaccord Adams analyst Adam Cutler said the two obesity drugs were its main drivers.

"Cutting some of their earlier stage programs and conserving cash is a smart thing to do in the current challenging environment," he added.

Orexigen, which mostly focuses on treating obesity, said it will stop the studies of a weight-loss drug and a potential treatment to reduce symptoms of obsessive compulsive disorder, but would maintain the intellectual property on these drug candidates.

"I had never been enamoured by the earlier two studies," Natixis Bleichroeder analyst Corey Davis told Reuters. "I did not see them as having obvious place in the commercial market."

The company also announced a string of management changes, including the resignation of its Chief Executive Gary Tollefson for health-related reasons.

Canaccord Adams' Cutler said the CEO's departure was expected as he was leaving for health reasons, but the other management changes were more to do with cost reduction. The company had named non-executive Chairman Eckard Weber as executive chairman and interim CEO on Nov. 10, after Tollefson had gone on medical leave.

Both, Cutler and Davis, have a "buy" rating on the stock, which was down $1.98 at $3.42 in afternoon trade on Nasdaq. The shares had earlier touched $1.55, their lowest since the company went public in April 2007. (Additional reporting Vidya L Nathan in Bangalore; Editing by Gopakumar Warrier, Anil D'Silva)