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FDA Lightens Up on Obesity Drugs

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What are those objects hovering over that all-you-can-eat buffet? Yep, they're flying pigs.

The Food and Drug Administration continues to lighten up on obesity drugs, something that looked impossible a couple of years ago after the agency rejected three obesity drugs in the span of a few months.

Earlier this year, Arena Pharmaceuticals (Nasdaq: ARNA  ) and VIVUS (Nasdaq: VVUS  ) gained FDA approval for their obesity drugs, and now Orexigen (Nasdaq: OREX  ) says the FDA is interested in reviewing its drug, Contrave, as quickly as possible.

The FDA still wants to see data from Orexigen's cardiovascular safety trial -- the Light Study -- but it's willing to look at the rest of the resubmission packet first and then allow the company to submit the data during the review.

The details still have to be worked out, but the proposal looks a lot like a fast-track designation that allows for a rolling submission of data. At best, we're probably looking at shaving a few months off the review.

The fact that the FDA is willing to do it at all is the more important detail. If the FDA thinks reviewing the data quickly is important, then it seems likely that the agency isn't going to be strict when reviewing the revised application.

Enrollment in the Light Study has been quicker than expected, so Orexigen is now shooting to enroll 9,000 patients by the end of the year, up from 7,000. The interim analysis will happen after the occurrence of 87 major adverse cardiovascular events -- heart attacks, strokes, and the like -- which could happen as soon as the second quarter of next year. Contrave could be on the market by the end of the next year.

Of course, for that to happen, the Light Study still needs to show that Contrave doesn't increase cardiovascular events compared to placebo. If the rate is just a little higher than placebo, which could happen by chance given the relatively small number of events, Orexigen will get another chance on the final review of the study, although that's probably a few years away.

Overall, this FDA news is fairly good, but investors should remember that Orexigen is still risky; the trial results remain a binary event that isn't a sure thing. The biggest binary event, the presidential election, is around the corner. Check out the Fool's new free report, "These Stocks Could Skyrocket After the 2012 Presidential Election," where you'll get ideas for companies that can benefit from each candidate's platform. Get your free copy by clicking here.

Fool contributor Brian Orelli has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. 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 Motley Fool has a disclosure policy.

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