The FDA ended three months of suspense today by finally approving Contrave, a new weight loss drug from Orexigen Therapeutics (OREX). Contrave was sidelined for three months as the FDA considered whether there was enough evidence to rule out excessive cardiovascular risk from the drug. The FDA has now decided that there is. Unfortunately, the long wait time has left the drug largely forgotten, and when it is mentioned in the media, it is invariably lumped in with two other recently approved weight loss drugs, Qsymia and Belviq, neither of which is selling well.
Contrave could be a very different story, as unlike the others, it is not a controlled substance. In fact, Contrave is a mix of two already approved medications, naltrexone (for alcohol and opioid addiction) and bupropion (an anti-depressant).
Orexigen has signed a deal with Takeda Pharmaceuticals to distribute Contrave. It remains to be seen whether the two companies will be able to overcome apparent physician reluctance to prescribe new weight loss medications. OREX shares are down $0.51 today, as the Street is apparently reacting to the good news with a “now we've got nothing to look forward to” attitude.
Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.