As Orexigen Faces FDA Will Weight Loss Landscape Change?

As Orexigen Pharmaceuticals (NASDAQ: OREX  ) once again prepares to face the FDA over its weight loss drug Contrave, we must take a look at how this may change the landscape for the weight loss drug market. Adding another competitor is not necessarily good news for the two companies who are already on the market, Vivus  (NASDAQ: VVUS  ) and Arena Pharmaceuticals (NASDAQ: ARNA  ) . Orexigen will directly compete with both companies. So far both Arena and Vivus have had trouble generating meaningful amounts of revenue from their products. Arena and its partner Eisai Pharmaceuticals generated a measly $8.4 million. While this represented a substantial increase in revenue, it is nowhere near where Arena will need to be for profitability (in fact Arena lost $25.3 million last quarter). This is nowhere near profitability for Arena. The numbers for Vivus are only slightly better, with Vivus recognizing $9.1 million in net product revenue . Even though revenue increased, the amount of prescriptions written for Qsymia actually dropped when compared to the fourth quarter of 2013.

However another competitor entering the marketplace could spell trouble for both Vivus and Arena. Contrave seems to be between Belviq and Qsymia in terms of effectiveness, and should it receive FDA approval it could pose a serious problem for Arena patients who are not seeing enough weight loss or for Qsymia patients who are worried about some of the potential side effects of the drug. According to the FDA, Qsymia in clinical trials was shown to have side effects including complications during pregnancy and increased heart rate. Qsymia is also, notably, not recommended for patients who have heart disease . Should Orexigen be able to avoid label issues like these, Contrave could have a leg-up in the competitive landscape. Orexigen also has a marketing partner in Takeda, which is a notable improvement over Vivus. Orexigen and its partner are making a huge bet on the drug, as Takeda plans to market Contrave through 900 sales representatives upon approval. With this in mind they could potentially capture a large share of the market if the drug is ultimately approved. Given Orexigen's intent to grab business away from Arena and Vivus, let's take a look at the opportunities.

Clinical data
Orexigen has more extensive safety data around their product, due to the additional trials conducted after receiving a CRL on Contrave. The trials focused on the incidence of heart attack and stroke. In the cardiovascular outcomes study, an interim analysis showed that Contrave did not meaningfully increase the incidence of heart attack and stroke. Notably, both Arena and Vivus have not yet conducted their own cardiovascular outcome studies. The positive safety profile should later help Orexigen as a marketing tool as side-effects are a concern with current therapies and the cardiovascular effects of these weight loss drugs has been a concern for the FDA. While there have not been any notable cardiovascular problems with either Qsymia or Belviq, Orexigen being the only company with cardiovascular outcomes data could have an advantage in the marketplace.

Efficacy
It is important to note as Orexigen once again goes in front of the FDA that the efficacy of Contrave is largely not in doubt. While the three drugs cannot be easily compared to each other given difference in study design, all three showed effectiveness, in terms of the amount of people who lose 5% or more of their body weight. With this in mind, Contrave will be an effective option in terms of the efficacy/side-effect balance that doctors will have to do. Now, it is important to note that Contrave potentially may have a more worrisome safety profile than Belviq (regarding side effects: Contrave patients reported dizziness and increased blood pressure, while Belviq patients reported dizziness and dry mouth).

Final thoughts
Orexigen is prepared to make a significant investment in Contrave. Orexigen entering the market should help to shake up the weight loss market, as the company and its drug could gain traction assuming approval. I think the cardiovascular outcomes data could help make a crucial difference here, as will the large sales force that Takeda is prepared to deploy for this drug. Time will tell.

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Read/Post Comments (6) | Recommend This Article (1)

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 June 09, 2014, at 2:12 PM, marp11 wrote:

    lets see now,

    'WHY WALL STREET HATES IDEX"

    BY MF

    HAHAHA

    WHY WALL STREET HATES KERX

    BY MF

    HAHHA

    PLEASE MF

    KEEP BASHING ARNA....PLEASE

  • Report this Comment On June 09, 2014, at 2:34 PM, marp11 wrote:

    The author suggests Contrave will not be a DEA scheduled drug. While the Bupropion component is not a DEA scheduled drug, the other component “Naltrexone” is a DEA schedule II:

    wwwDOTdeadiversionDOTusdoj.gov/21cfr/cfr/1308/1308_12.htm

    wwwDOTdrugsDOTcom/pro/naltrexone.html

    The FDA has not approved Contrave let alone decide whether or not to assign a DEA classification.

    Its too early to know anything...

    First, wait to see if Contrave is approved

    Then, check for REMS

    And, check the label

    And, check the scheduling

    Then, look at the sales force

    And, see if they are dedicated or part of a team already assembled to sell diabetes drugs etc.

    And, if they are fully employed or contract

    Then, see if doctors are willing to write for these 2 drugs

    And, if they are not insulted being asked to ask their patients to pay 4x-6x the price for generics put in one capsule

    And, wait too see in insurance will cover the compound or require failure on generics first

    (with Obamacare might have to wait until March 2015 for major increase in covered lives)

    Then, wait for them to get advertising

    And, wait for FDA to approve commercials

    And, if by the time the get any traction at all whether BelPhen shows superior results

  • Report this Comment On June 09, 2014, at 3:43 PM, gazoo99 wrote:

    Absolutely correct marp

  • Report this Comment On June 09, 2014, at 10:01 PM, MichaelHamilton wrote:

    vivus is more than a one drug company, it averaged $40m sales in the last two quarters. The fool keep dribbling on about how bad this company is but I am not convinced.

  • Report this Comment On June 10, 2014, at 3:48 AM, Sophiaa wrote:

    Great Article!In the past, the most difficult problem for me was to stick to the diet/fitness. Old bad habits are the real enemy in weight loss. Many of the exercise programs actually do work, but if you do not have the proper mindset for it, then it is alreadyuphill from the start. I found the best way to lose weight At http://weightlosstipsproductreviews.blogspot.com that really helped me.

  • Report this Comment On June 11, 2014, at 9:39 AM, marp11 wrote:

    The OREX outcome this morning brings to light the absolute lack of knowledge on behalf of Seeking Alpha and Motley Fool as each was so sure, so pumping the approving and hyping the soon coming soaring share price at hand. This while continuing their hit pieces on ARNA while colluding with their payers in the constant MM/Hedge tactical, strategic games underway stripping profits on any rise in the pumper venue while simultaneously continuing the NAKED SHORT attacks on ARNA. I give Arena/Easai management credit for not over zealously being concerned about it at all for they know the value of their contender Belviq and the value of their pipeline regardless of the coordinated, colluded attacks by this BIG HIT MACHINE that has been doing it's dirty nasty evil for ever so long now. Way too long actually and something seriously needs to be done about it but won't for as the final paragraph from Deep Capture the Story of Dendreon posted below states the SEC is in on it with them acclaiming such creates stable markets. This is why crooks like Ichan are heralded as icons when in fact they are government supported criminals.

    In answer to the question of how many people have died, we know only from the data that abusive and illegal short selling has affected many hundreds of small biotech companies with all manner of medicines. We know that the vast majority of those companies are now gone, and that some number of them, if left to the rigors of the market, but not to the whims of criminal short sellers, would have one day delivered their medicines to patients.

    But, of course, we do not know who the criminal short sellers are. According to the Securities and Exchange Commission, that is a big secret – “proprietary trading strategies.”

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