FDA rejects Orexigen diet drug over heart risks

U.S. health regulators rejected Orexigen Therapeutics Inc’s weight-loss drug and requested a clinical trial to resolve heart safety concerns, dealing a blow to what stood to be the first new diet pill in a decade.

Orexigen shares fell 72.5 percent, or $6.59, to $2.50 as analysts projected a new study could take anywhere from two to five years to conduct with no guarantee of success.

“It’s clearly the worst-case scenario,” said Lazard Capital Markets analyst William Tanner.

Orexigen Chief Executive Officer Michael Narachi expressed surprise and disappointment at the decision and said the company would almost certainly need additional capital to fund a new study.

The setback raised new doubts about the drug industry’s ability to develop prescription weight-loss drugs, a field littered with disappointments, at a time when two out of three Americans are obese or overweight.

Hopes had run high for Orexigen’s Contrave, one of three obesity drugs under U.S. review, after a Food and Drug Administration advisory panel voted 13-7 in December to recommend approval.

After the panel backing, Contrave was thought to have the best shot at approval, compared with Vivus Inc’s Qnexa and Arena Pharmaceuticals Inc’s lorcaserin. Qnexa faces concerns over heart and birth-defect risks, while lorcaserin faces worries over cancer risk and had been seen as the furthest from approval.

But according to Orexigen, the FDA noted concern about Contrave’s cardiovascular effects when used long-term in a population of overweight and obese subjects.

The FDA told Orexigen it must conduct a study “of sufficient size and duration” to demonstrate that the risk of heart attacks, strokes and other major cardiovascular events does not undermine the drug’s risk-benefit profile, the company said.

Lazard’s Tanner said the odds of Orexigen pursuing a new study were well below 50 percent.

“I don’t know who would be willing to give them the dough to do this thinking that it is going to take a long, long time and what’s the likelihood you are going to get an outcome that is going to satisfy the FDA?” he said.

Contrave combines naltrexone, a medicine used to fight alcohol and drug addiction, with the antidepressant bupropion. It is intended to boost metabolism while curbing appetite and cravings. Japan’s Takeda Pharmaceutical Co Ltd holds North American marketing rights to Contrave.

Before Tuesday’s news, BioMedTracker had projected Contrave sales could reach $1.2 billion by 2018 if the drug reached the market.

SURPRISED AND DISAPPOINTED

“We are surprised and extremely disappointed with the agency’s request in light of the extensive discussion and resulting vote on this topic at the December 7 advisory committee meeting,” Narachi said in a statement.