November 30, 2010
FDA TO Decide On New Diet Drug
Another diet drug is set to face government scrutiny next week, just weeks after two rival diet drugs failed to convince US regulators that minor weight loss associated with their drugs made up for major health risks.
Orexigen Therapeutics, partnered with Takeda Pharmaceuticals, is hoping that its new experimental weight-loss drug Contrave will meet final approval to tap into the potentially huge US market, where more than 60 percent of Americans are overweight.
If Contrave is approved, it could boost sales by more than $1.2 billion by 2018, according to forecasts by BioMedTracker.
That would be a huge boost to Orexigen and the whole obesity sector, which raked in just $381.5 million in 2009, according to data from IMS Health.
US Food and Drug Administration staff reviewers are due to release an assessment of Orexigen's data on Friday, offering a glimpse into the agency's plans.
Outside experts will take the staff's reviews into consideration as well as Orexigen's perspectives during an FDA advisory meeting December 7.
Jeffries & Co. analyst Corey Davis is among some analysts that are confident in the drug's chances for approval. Orexigen "is our top small cap pick right now for investors willing to stomach" the indecisions of the FDA's review, he said in a recent statement.
Orexigen is hoping to avoid agency concerns about possible side effects with Contrave, which combines two medicines -- naltrexone and bupropion -- already cleared for other uses.
"Basically, the studies are good," said Loss, but the issue that remains is whether the FDA panel who rejected rival drugs will now accept Contrave's risks as well as the limited amount of data.
The FDA will weigh the advisory panel's recommendations in making a final decision, which could come by January 31, 2011.
While weight can be managed by diet and exercise in most cases, some doctors and other experts say such changes can be difficult and that a medicine could help, especially as obesity rates in the US continue to climb.
Orexigen's CEO Michael Narachi told Reuters earlier this year that he was keeping a close eye on panel meetings of rival drugs to gain a better sense of the FDA's position on diet drugs.
The FDA rejected Arena and partner Eisai Co Ltd's drug, Lorcaserin, in late October, citing potential concerns about cancer risk following tumors that were discovered during animal testing.
The FDA also rejected Vivus' Qnexa a few days later, asking for more data on its heart risks.
Both rejections followed negative FDA advisory panel reviews.
BioMedTracker estimates that while Contrave's chances for approval are lessened in the wake of its rivals, it still has a 75 percent chance of making it onto the market.
Wall Street also holds hope for the drug as well.
"We've long felt it's a significant strategic advantage to be third in the obesity regulatory queue," JP Morgan analysts wrote earlier this month.
Orexigen "appears focused on applying knowledge gained from recent FDA panels for Qnexa, Lorcaserin, and Meridia to prepare for its own meeting, especially in managing Contrave's potential risks," the analysts said.
But the potentially dangerous side effects of Contrave's two drugs could still be its downfall.
Naltrexone, also used for alcohol dependence, is known to cause confusion, hallucinations, vomiting and headaches. Bupropion, like other depression drugs, already has a strong boxed warning about possible suicidal behavior that Contrave would also have to carry if it is approved -- something that could hinder use.
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