(Adds details, analyst comment; updates shares)
By Natalie Grover
June 11 Orexigen Therapeutics Inc said
the U.S. Food and Drug Administration delayed a decision on the
marketing application for its obesity drug, contrave, by three
months, sending the company's shares down as much as 20 percent
The FDA indicated that the extension was needed to reach
agreement on packaging and other post-marketing obligations
related to the evaluation of potential heart risks associated
with the drug, Orexigen said.
Analysts said they still expected contrave to be approved,
as the FDA and Orexigen were in talks over the package insert
and other post-marketing requirements.
The ongoing discussions suggest that the regulator has
become more comfortable with contrave's risk/benefit profile,
Wells Fargo analyst Brian Abrahams wrote in a note.
The FDA, which rejected the drug in 2011, had asked Orexigen
to conduct additional trials to assess potential heart risk of
An interim analysis of an 8,900-patient study showed that
overweight and obese patients receiving contrave did not have a
higher heart risk compared with those on a placebo, the company
said in November.
Contrave is a combination of the antidepressant bupropion
and Orexigen's formulation of naltrexone, designed to prevent
Obesity has assumed epidemic proportions in the United
States, with over one-third of adults in the country being
obese, according to the Centers for Disease Control and
If approved, contrave will compete with Vivus Inc's
Qsymia and Arena Pharmaceuticals Inc's Belviq, which
have been slugging it out to conquer the weight-loss market
since 2012. Despite their potential, sales of the two drugs have
been far short of expectations.
Some analysts blame marketing strategies for tepid sales,
while others say physicians are unconvinced that new drugs have
overcome the safety issues that caused the withdrawal of earlier
Side-effects have resulted in a number of diet treatments
being withdrawn from the market. Among these are the notorious
"fen-phen" combination that was pulled out in 1997 due to heart
valve problems and Sanofi SA's Acomplia, which went
off the market in 2008.
Qsymia and Belviq have been plagued by safety concerns,
ranging from depression and anxiety to heart risks and potential
harm to fetuses in pregnant patients.
Orexigen, which has licensed the North American rights to
contrave to Takeda Pharmaceutical Co, entered into a
agreement with Sanofi in November to manufacture the drug
outside North America.
Contrave is also currently being evaluated by European
regulators. The FDA is also in talks with Orexigen regarding the
late-stage development of the company's second experimental diet
Wallachbeth Capital analyst Bob Ai estimated that contrave's
global sales could touch $850 million by 2020.
San Diego-based Orexigen's shares were down 15.8 percent at
$5.73 in late morning trading on the Nasdaq.
(Additional reporting by Anjali Rao Koppala in Bangalore;
Editing by Don Sebastian and Kirti Pandey)