Orexigen Therapeutics Inc. slid the most in four months in Nasdaq trading after the drugmaker said it will halt U.S. development of the diet pill Contrave because of uncertainty in the regulatory process.
The La Jolla, California-based company fell $1.06, or 33 percent, to $2.12 at 4 p.m. in Nasdaq Stock Market composite trading. The drop was the biggest decline since a 73 percent plunge on Feb. 1 after the Food and Drug Administration said a large study on heart risks would be required before Contrave could be approved.
“Is this drug absolutely dead in the water?” Charles Duncan, a senior biotechnology analyst at JMP Securities in New York, said in a telephone interview today. “No, but I do think it should be discounted by 90 percent.”
Orexigen said in a statement today that it will appeal the FDA’s decision, look at selling Contrave in international markets and pursue partnerships for new products with closely held companies. Orexigen and partner Takeda Pharmaceutical Co. of Osaka, Japan, had been in a race with Vivus Inc. and Arena Pharmaceuticals Inc. to introduce the first new obesity medicine in the U.S. in more than a decade.
Orexigen adjusted its strategy after the FDA denied the company’s proposal to sell the medicine for people with lower cardiovascular risk until data from the larger study could be reviewed, a move the company called “unprecedented.” Orexigen plans to engage the FDA’s formal dispute resolution process within the next 30 days and expects a response from the agency 30 days later.
Benefits Versus Risks
“The agency has always been clear with companies developing weight-loss products that we will weigh the drug’s potential benefits with the potential risks,” Erica Jefferson, a spokeswoman for the FDA, said today in an e-mail.
Contrave increases blood pressure, a risk also seen with Abbott Laboratories’ now-withdrawn diet pill Meridia, she said. The agency pulled Meridia from the market last year after it was tied to heart attacks and strokes in a large outcomes study.
Two Contrave tablets taken two times a day helped twice as many patients in studies lose at least 5 percent of their weight compared with a placebo after 56 weeks, meeting one of two FDA guidelines for how effective diet pills must be to get approval. The product is a combination of two approved drugs that target different parts of the brain influencing appetite and cravings.
The FDA is planning to ask an advisory committee to review general requirements for cardiovascular safety and diet pills. The agency told Orexigen that the meeting won’t be held until early next year, after which all products under development may be “measured by a different bar” for approval, Orexigen Chief Executive Officer Michael Narachi said.
“All bets are off” until that meeting takes place, Narachi told investors and analysts today on a conference call.
Orexigen’s decision doesn’t affect Vivus’s plans to submit the additional data requested by the FDA on its drug Qnexa in the fourth quarter, said Timothy Morris, the chief financial officer for Mountain View, California-based Vivus, in an e-mailed statement.
Arena, which is developing a medicine called lorcaserin with Tokyo-based Eisai Co., is also “moving forward to do what’s needed” to bring its drug to patients, said David Schull, an outside spokesman for the company, in an e-mail.
Vivus fell 29 cents, or 3.4 percent, to $8.25 in Nasdaq trading. San Diego-based Arena dropped 3 cents, or 2.1 percent, to $1.38.
About 68 percent of American adults are overweight, raising their risk of diabetes, heart disease, high blood pressure and cancer, according to a 2008 National Health and Nutrition Examination Survey. Almost 34 percent are obese, measured as a ratio between weight and height.
Xenical, from Basel, Switzerland-based Roche Holding AG, was approved in 1999 and is the only chronic medicine approved for weight loss in the U.S.