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Will Contrave Get Past the FDA?

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Orexigen's (Nasdaq: OREX  ) Contrave has the distinction of being the only obesity drug in recent history to get a positive recommendation from a Food and Drug Administration advisory panel. Both Arena Pharmaceuticals' (Nasdaq: ARNA  ) lorcaserin and VIVUS' (Nasdaq: VVUS  ) Qnexa failed to gain a recommendation and were turned down by the FDA.

But don't jump in ahead of next Monday's decision just yet. While a negative panel vote almost always leads to the FDA turning down a drug, a positive panel doesn't guarantee a thumbs up from the agency. It says so right on the FDA's website: "Although the committees provide advice to the Agency, final decisions are made by FDA."

InterMune's (Nasdaq: ITMN  ) pirfenidone and Dendreon's (Nasdaq: DNDN  ) Provenge, the first time, are just some of the many examples of the FDA blowing off its advisors' opinions. And the 13-to-7 vote isn't exactly a ringing endorsement for Contrave.

Obesity isn't as life threatening as idiopathic pulmonary fibrosis or cancer, which pirfenidone and Provenge treat. Diet and exercise work pretty well at helping shed the pounds, and the FDA seems predisposed to be hard on any drug that treats obesity. Just because the advisory panel let Contrave slip by doesn't mean the agency will.

The problem is intensified by the side effects observed in weight-loss drugs that have been pulled from the market after the agency has approved them: Wyeth's fen-phen and Abbott Labs' (NYSE: ABT  ) Meridia. The agency doesn't need another repeat.

While I'm inclined to guess that the FDA will send Contrave back to the drawing board, it's just that -- a guess. Handicapping the FDA's decision on Contrave is more difficult than it was with lorcaserin and Qnexa, where a negative panel was a death sentence for the drug.

In the long run, Contrave -- and lorcaserin and Qnexa -- may be approvable, but investors need to be prepared for a wait.

That's my opinion. What's yours? Take our Foolish poll below and fill in your reasoning in the comments below.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Motley Fool Alpha owns shares of Abbott Laboratories. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

Read/Post Comments (8) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 24, 2011, at 2:54 PM, bobbyboyd wrote:

    I regret the five minutes I wasted of my life reading your "article." And please note I use that adjective in the loosest possible way.

    Like a blunt pencil, your offering was "pointless."

    I will never get those minutes back again. I'm sad and lament my loss.

    Please do your fellow man a great service and promise NEVER to put pen to paper EVER again.

    Thank you in advance for your co-operation.

  • Report this Comment On January 24, 2011, at 3:22 PM, Mynx828 wrote:

    I agree 100% with BobbyBoyd's assessment.

  • Report this Comment On January 24, 2011, at 3:31 PM, davetrevor wrote:

    Is anyone looking over at the CAP ratings of the stocks mentioned in this article? Isn't it funny that two successful biotech stocks have low CAP ratings yet the two obesity drugs to fail to get approval at the Ad Comm have the same or higher ratings than Orexigen, which did get an approval from the Ad Comm?

  • Report this Comment On January 25, 2011, at 12:53 PM, mordowney wrote:

    I hope you know stocks because you don't know obesity. Not life-threatening? Deaths due to obesity are just about as high as smoking-related deaths. Diet and exercise work pretty well? What planet are you from? We wouldn't have an obesity problem is diet and exercise worked.

    Morgan Downey

  • Report this Comment On January 26, 2011, at 1:27 AM, fafadc9 wrote:

    you fool. buy

  • Report this Comment On January 27, 2011, at 9:16 PM, Techie69 wrote:

    Contrave back to drawing boards unless you fat fools want also a heart problem of a different magnitude.

  • Report this Comment On January 28, 2011, at 4:33 PM, wayneoworld wrote:

    Better buy into orex because contrave will be approved . The benefits outweigh the downside of contrave. Want to live longer? Eat less. Want to eat more? Take Contrave.

    Better buy now. Only a few days away from the decision.

    You may be right, I may be crazy. I just think it's time for a new obesity drug. People are killing their selves at the dinner table anyway. Why not have a new tool to help with the insanity.

    If it's not approved the FDA needs to find some more members for their advisory committee.

  • Report this Comment On February 01, 2011, at 3:20 AM, shoofly2 wrote:

    Wow. Lots of angry longs here! I think the article is nothing if not fair and impartial...just stating the facts. No one here remembers the DNDN debacle? Lord.

    @ the indignant bobbyboyd...what a snit! I hope you're not too heavily long ahead of an FDA decision without a hedge. That just wouldn't be prudent. Thanks for the laughs...


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