Editor’s Note: The article below has been updated to include commentary on significant blowback from the FDA regarding Orexigen’s data release, which could result in major repercussions for Orexigen.
Source: Orexigen Therapeutics,
Orexigen Therapeutics (NASDAQ: OREX) reported surprising interim trial results for its FDA-approved obesity drug Contrave.
Although the trial was designed to prove that Contrave doesn't increase the risk of a heart attack, early results suggest that the weight-loss drug may actually reduce the chances of having one.
First, a bit of background
The FDA balked when it first considered Contrave's application for approval. The agency opted against Contrave -- a combination of an alcohol and opioid dependence drug with a depression drug -- over fears that it could cause high blood pressure and bump up the risk of heart disease.
As a result, Orexigen launched a cardiovascular outcomes study in 2012 to prove the FDA wrong.
Last fall, early results from that outcomes trial convinced the FDA to grant Contrave approval for use in obese patients who either have a body mass index north of 30, or in patients with a BMI of at least 27, and one weight-related disease, such as medically controlled high blood pressure.
Contrave's approval made it the third obesity drug to win over FDA regulators, joining Vivus's (VVUS +0.00%) Qsymia and Arena Pharmaceuticals' (ARNA +0.00%) Belviq, which were both approved in 2012. Shortly after Contrave's go-ahead, the FDA also approved a fourth obesity drug. Novo Nordisk's (NVO 0.84%) Saxenda, a high-dose formulation of the diabetes drug Victoza that got the green light in December.
What's at stake
Obesity rates remain a major cause of heart disease. According to the Centers for Disease Control, 34.9% of all Americans are obese, and that's a discouraging statistic, given that the World Heart Federation reports that 21% of heart attacks can be traced back to having a body mass index that is above 21.
Since the CDC estimates that 68.8% of Americans are overweight, it's probably a good bet that the percentage of Americans diagnosed as obese will continue to climb. If so, then the amount of money that Americans spend on medical care for obesity, such as treating heart disease, will jump from its $147 billion-plus annual rate. As a result, obesity's impact on our healthcare system could be enormous over the coming decades.
Reducing heart attack risk
Last September's FDA approval of Contrave was based on a 4,500-patient study that showed that people treated with Contrave lost 4.1% more weight on average than people that were treated with a placebo. Additionally, the trial showed that 42% of patients on Contrave lost 5% of their body weight or more.
That's a solid showing, but those results don't really differ too much from the results posted for Qsymia, Belviq, or Saxenda. Patients taking Qsymia in two separate trials lost an average of 6.7% and 8.9%, respectively; Belviq patients weight fell by 3% to 3.7% after one year; and Saxenda patients lost 4.5% of their weight after one year.
While investors should always hesitate to compare trial results from separate trials (all sorts of things can impact outcomes), this clustering suggests that there hasn't been a clear winner, at least perhaps until now.
The latest interim data released by Orexigen, which shows that Contrave patients suffered fewer heart attacks during trials, could be the game-changer necessary to tilt the balance in favor of prescribing Contrave, rather than these other drugs.
The Contrave study included 8,910 patients that, on average, were 61 years old and had a BMI of 37.3. At the 25% interim analysis mark, 59 patients in the placebo group suffered a major cardiac event, such as a heart attack. For comparison, there were only 35 such cardiac events among those taking Contrave.
Source: Orexigen Therapeutics.
Contrave's better-than-placebo results are impressive, but what may be even more intriguing is that Orexigen doesn't think that the reduced number of heart attacks in the trial was the result of weight loss. Instead, it appears that the cardiac benefit may have come directly from the drug itself. If that's the case (and these results hold up throughout the remainder of this trial), Orexigen could have an entirely new opportunity to expand Contrave's label that stretches beyond obesity. But don’t uncork the champagne yet, because there’s a big issue with the data disclosure that could rain on Orexigen’s parade.
Storm clouds incoming
The FDA is not happy with Orexigen releasing the interim data, with Office of New Drugs head John Jenkins noting that the data are “premature” and “unreliable.” Orexigen getting called out by the FDA for potentially overplaying its hand would be bad enough, but the agency is reportedly concerned that the study could be compromised by the disclosure. As Jenkins noted in an interview with The Wall Street Journal, he worries that patients “will think they know the benefit of the drug – which we think is a highly unlikely random chance finding – and may drop out or choose not to enroll in the next trial.”
And, of course, don’t forget about potential penalties – the FDA could slap Orexigen with fines for the disclosure, and in fact the agency could go as far as withdrawing its approval for Contrave. Will the worst happen? Time will tell.
While there's reason to be excited about the drug's potential, these are major potential threats to the company.
Looking ahead
If Orexigen is able to overcome these hurdles (and it’s difficult to read the tea leaves right now, so stay tuned), and if the cardiovascular data continue to look good, then there could be a good opportunity for Orexigen to differentiate Contrave from other drugs, and that's good news given that sales for obesity drugs have been more of a trickle than a flood.
In the fourth quarter, Qsymia's sales were just $12.7 million, Belviq's sales were only $10 million, and Contrave's sales through its first 10 weeks on the market clicked in at $6.5 million. The relatively timid embrace of obesity drugs by doctors so far suggests that investors might want to rein in their enthusiasm a bit for Contrave even if Orexigen is able to overcome the issues mentioned above, especially given that Orexigen's shares have doubled since last fall. Instead, a better idea might be to wait to see what happens with the FDA and, if Orexigen gets a positive resolution, keep an eye on Orexigen's earnings over the next few quarters to see if Contrave demand picks up. If it does, then it might be worth taking a shot at this stock. Regardless, the interim data could indicate that Contrave may be able to reduce the number of heart attacks Americans suffer each year, and that's potentially great news assuming the data continues to show that benefit and the drug remains on the market.
