Orexigen Therapeutics was left for dead earlier this year when its obesity drug was shot down by the FDA. But today it had a message for investors that could be interpreted as “hold on, we might not be dead yet after all.”
The San Diego-based biotech company (NASDAQ: [[ticker:OREX]]) said today that has decided to re-start development of its weight loss combo drug, naltrexone and bupropion (Contrave) after a recent meeting with the FDA to discuss the steps needed to seek approval once again. Orexigen walked away from the recent meeting feeling that the FDA’s clarified guidance was “reasonable and feasible and provide the certainty required to reinitiate development of Contrave,” the company said in a statement today.
Orexigen stock shot up 86 percent in after-hours trading after the announcement to $2.73 a share at 8 pm Eastern.
“We are encouraged by this development as it offers Orexigen a path forward, which previously did not appear to exist,” said JP Morgan analyst Cory Kasimov, in a note to clients.
The FDA has been tough on makers of new weight loss drugs lately. It has demanded loads of data to prove they are safe since there’s potential for them to be used by millions of people with a chronic condition that isn’t immediately life-threatening. Three major competitors, San Diego-based Arena Pharmaceuticals (NASDAQ: [[ticker:ARNA]]), Orexigen, and Mountain View, CA-based Vivus (NASDAQ: [[ticker:VVUS]]), all had new drug applications turned down by the FDA in the past year. In Orexigen’s case, regulators asked for a long-term study to show that the new product wouldn’t raise the risk of a heart attack or stroke. That’s often a show-stopper in biotech, since such studies can take years, thousands of patients, and millions of more dollars.
But apparently Orexigen says it has found a way forward that’s practical for the company and acceptable to the FDA. After further negotiating over trial designs, Orexigen said it agreed with FDA on a plan to enroll overweight and obese patients in a study that would require 87 total cardiovascular events (heart attacks or strokes) before statisticians try to suss out any difference between the new drug and placebo. Orexigen’s math says such a study could enroll fewer than 10,000 patients, and generate an interim analysis within two years of initiation. Orexigen says it hopes to start the cardiovascular study in the first half of 2012, in hopes of re-submitting its application to the FDA and winning approval in 2014.
Orexigen’s original application included data from 4,500 patients. The company has lost more than $337 million since its founding in 2002, according to its most recent quarterly report.
