Down 18%: Is Orexigen a Bad News Buy?

The stock cratered 18% on a delayed FDA decision...but was the sell-off overdone?

Michael Douglass
Michael Douglass and Jason Moser
Jun 11, 2014 at 11:32AM
Health Care

Orexigen Therapeutics (NASDAQ: OREX) reported this morning that the FDA is delaying a decision on its anti-obesity drug Contrave for three months -- until September 11th. The stock promptly sold off (down 18% as of this writing) as investors reacted to the delay. But was the news really that bad?

After all, the FDA's delay was reportedly tied to a need to hash out post-marketing requirements, which would seem to imply approval for the drug is in the works. Was the sell-off maybe a little overdone?

In the video below, Motley Fool analysts Michael Douglass and Jason Moser discuss Orexigen and its competitors Arena (NASDAQ: ARNA) and VIVUS (NASDAQ: VVUS) and why, even with a potentially over-done sell-off, there are still better opportunities in biotech.