Orexigen slumps as FDA calls for more studies with obesity drug Contrave

Shares of US biotech firm Orexigen Therapeutics (Nasdaq: OREX) plunged more than 70% to $2.47 in pre-market trading Tuesday, as the company announced a severe setback in the US approval of its obesity drug candidate Contrave (naltrexone HCl/bupropion HCl) extended-release tablets, with the US Food and Drug Administration saying it cannot clear the drug unless the company undertakes further costly clinical studies.

Orexigen and Japanese partner Takeda Pharmaceutical (TSE: 4502) said that, on Monday, the FDA issued a complete response letter regarding the New Drug Application for Contrave for the treatment of obesity, including weight loss and maintenance of weight loss.

The FDA noted concern about the cardiovascular safety profile of naltrexone/bupropion when used long-term in a population of overweight and obese subjects. Specifically, the letter stated that "before your application can be approved, you must conduct a randomized, double-blind, placebo-controlled trial of sufficient size and duration to demonstrate that the risk of major adverse cardiovascular events in overweight and obese subjects treated with naltrexone/bupropion does not adversely affect the drug's benefit-risk profile."