Orexigen Therapeutics Rallying After Arena Pharmaceuticals' FDA Approval

Orexigen Therapeutics

is trading higher on the session followings its competitor's, Arena Pharmaceutical's

FDA approval yesterday. Orexigen is also developing an anti-obesity drug, and as a result, JP Morgan upgraded the company to Overweight today. JP Morgan noted: "We have been and continue to be confident in Contrave's (partnered with Takeda) ultimate approvability based on the drug's positive Phase 3 program and FDA AdCom (13-7 vote in favor of approval in Dec 2010). We'd further remind investors that the company has a second unencumbered obesity asset in Empatic that has completed Phase 2b testing and could advance to Phase 3 if VVUS's Qnexa is approved. The bottom line is that we expect this valuation discrepancy to narrow over time, and as such, we would be buyers of OREX at current levels." Orexigen Therapeutics is currently trading at $5.57, a gain of $0.65 or 13.21%.