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Expert Financial Analysis and Reporting

Company Reports Success in Four Phase III Trials (OREX, $4.23)

Orexigen has just reported success in four phase III trials for Contrave in obesity.

Contrave Overview

The key efficacy measure in these trials was that ≥ 35% of patients on the drug lose at least 5% of body weight and that the proportion is double placebo or that mean weight loss is ≥ 5% difference between active product and placebo group. Contrave hit both efficacy measures in all four trials. You may recall that Arena’s anti-obesity agent lorcaserin in the BLOOM study did not achieve the benchmark that the percentage of patients losing more than 5% of their body weight should be double that of placebo.

When the results of the BLOOM study were announced on the morning of March 30, 2009, the stock traded down on heavy volume. ARNA closed at $4.14 on March 29 and closed at $3.23 on March 30 with 35 million shares trading. ARNA is not back to its pre-BLOOM stock level as it closed at $4.00 last Friday, July 17. The Contrave data was received much better than Arena’s lorcaserin data with the stock trading up about 10% in the early morning trading. The analysts on the call were all congratulating Orexigen on the data.

There are some interesting things to note beyond Contrave meeting all of the proscribed benchmarks of the FDA. Most impressive was that in a trial of diabetics Contrave was able to lower HbA1c by about 0.5%. This is a measure used to judge improvement in diabetic patients and the 0.5% improvement is better than some approved drugs for diabetes. In the diabetic population, Contrave appears to be an effective therapeutic agent in addition to reducing weight. It was also effective in increasing HDL cholesterol (the good cholesterol) and in reducing triglcerides.

It is very encouraging that Contrave showed efficacy against diabetes and improvements in markers of cardiovascular health as judged by improving blood lipid levels. As is always the case, there are some side effect issues. Contrave is a combination of the anti-depressant drug buproprion and naltrexone, a drug that is primarily used to treat alcohol dependence. In the four clinical trials, there was a meaningful amount of nausea that is characteristic of buproprion. There was also a slight 1 mm Hg increase in blood pressure and an increase in pulse of 1 beat per minute. These are seen with buproprion used alone and are not surprising. One issue that analysts worry about is whether the FDA will consider weight loss as a cosmetic treatment rather than disease treatment. Side effects acceptable for treating depression may not be acceptable for weight loss. Because nausea is transient and the blood pressure and pulse effects are so small and because of the offsetting positive effects on HbA1c and blood lipids, I am inclined to think that this is not going to be an issue. I think that the chances for approval of Contrave are excellent.

Tagged as + Categorized as Company Reports


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