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PropThink: FDA Interested in Accelerating Contrave's Approval; Timeline Not Yet Clear


By Jake King

The competition among obesity-drug makers continues to heat up Monday following an announcement from OrexigenTherapeutics (NASDAQ: OREX) that the company may be able to expedite the approval process for Contrave. The company previously requested that the FDA consider Contrave's approval based on existing data and a postmarketing requirement to supply the interim cardiovascular outcomes from the ongoing Light Study shortly after approval. And while the request was denied by the Center for Drug Evaluation and Research (CDER), the government agency is interested in discussing a faster resubmission for Contrave, and OREX management made it clear in Monday's conference call that they are optimistic about accelerating the process.

Contrave's review and approval hinges on safety analyses from the Light Study, which measures Major Adverse Cardiovascular Events (MACE) in patients taking Contrave vs. placebo. The Light Study is set to release interim trial data after the 87th MACE, which is dependent on the observed rate of MACE in the study. Enrollment has reached 7,000 patients, and OREX plans to increase the number of patients enrolled to 9,000 by the end of 2012, expediting the time to an interim analysis by increasing the observed rate of adverse events. In pre-trial discussions with the FDA (a Special Protocol Assessment), the threshold for approval was established as the exclusion of a doubling of risk of MACE at the interim analysis. The company expects the interim analysis to be moved forward by as much as two months with the larger enrollment, possibly into the second quarter of 2013.

The company now hopes to resubmit Contrave's New Drug Application ahead of the interim assessment and then provide data from the analysis during the drug's review period. The standard review period is ten months, and if the FDA agrees to Orexigen's proposed process, the review clock could begin weeks or months ahead of the interim analysis. In Monday's conference call, management displayed confidence that the FDA and Orexigen will come to a positive conclusion in the near-term, but details are inconclusive and will be forthcoming pending further discussion. The company guided that they won't be filing anything before next year.

OREX opened Monday morning with a 5.5% jump, but by noon had traded below Friday's closing price. A lack of concrete timeframes and new safety data are pressuring OREX in the afternoon, along with fears that today's public relations actions are indicative of a capital raise; just last month, Orexigen initiated a shelf registration allowing the company to offer up to $150M in mixed securities. A week later the company reported that it would be meeting with "investors, analysts and others" and released a new investor presentation. Although management guides that current cash will last through Contrave's NDA resubmission, the timeline for the resubmission may have just been accelerated with Monday's news. Investors should pay close attention to financing signals as we learn more about the possibility for a faster resubmission, and expect a capital raise with near-certainty after the NDA is submitted. While Monday's news is an incremental positive, cardiovascular safety data will ultimately determine Contrave's approval, and investors won't have details until the interim analysis next year. Obesity drug-makers Arena Pharmaceuticals (NASDAQ: ARNA) and Vivus Inc. (NASDAQ: VVUS) are off similarly in trading on Monday.

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