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Don’t Buy Orexigen on Diet Pill Hopes

Arena Pharmaceuticals and VIVUS haven't exactly set a bullish tone for OREX

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The good news is, it looks like Orexigen Therapeutics (OREX) is going to be ushered into the relatively exclusive club of FDA-approved diet-pill manufacturers. The bad news is, the club’s only two current members — VIVUS (VVUS) and Arena Pharmaceuticals (ARNA) — haven’t exactly been lighting it up when it comes to sales.

Granted, both biopharma companies in the diet pill business encountered unexpected problems following the approval of their respective drugs. But still, getting the nod from the Food and Drug Administration is a big deal.

The big question is: What are the odds Orexigen’s weight-loss drug Contrave will be able to meaningfully break into this tricky market? Or, asked more specifically, is there a chance that Contrave could hit a headwind similar to the ones that VIVUS’ Qsymia and Arena’s Belviq hit?

Contrave’s Trail Was Already Blazed (Just Not Very Well)

Just so there’s no confusion, Orexigen’s diet drug Contrave has not yet been approved by the Food and Drug Administration. The company simply believes its research has shown the drug does NOT increase heart-related risks, which is the concern that prompted the FDA to reject the drug back in early 2011.

It should be noted, however, the administration has become remarkably open-minded regarding diet pills lately; the approval of Qsymia and Belviq in the middle of last year was the first time in more than a decade that a pill of that ilk had won the Food and Drug Administration’s proverbial blessing.

As for the odds that Orexigen’s Contrave will ultimately be approved, the professional biopharma handicappers are saying yes, the diet pill will get the marketing green light. The basis for the assumption is that this drug is arguably less worrisome than diet drugs already approved by the FDA.

Contrave is the combination of two drugs already approved by the Food and Drug Administration: sustained-release naltrexone, and bupropion. The combination of drugs is believed to decrease appetite by balancing a person’s energy levels.

The two drugs together increase dopamine activity (leading to a reduction in appetite and increase in energy output by increasing activity of pro-opiomelanocortin neurons), while simultaneously blocking opioid receptors on the pro-opiomelanocortin neurons (which increases pro-opiomelanocortin activity). In English, Contrave reduces appetites and causes the body to burn more of its stored energy.

If the idea rings a bell, that may be because Qsymia is also the combination of two distinct, already-approved drugs phentermine and topiramate. Phentermine is an appetite suppressant, and topiramate is believed to increase satiety — the feeling of fullness.

Arena’s Belviq pills only contain one active known drug, though it operates using the same basic approach that Contrave and Qsymia use. That is, Belviq activates the brain’s serotonin receptors, which heighten the feeling of satiety.

While the exact mechanism of action may not be the same, it’s not like Orexigen Therapeutics is going to ask the Food and Drug Administration to approve something it hasn’t seen — and approved — already.

But an approval hardly guarantees success. Just ask VIVUS and Arena Pharmaceuticals.

Article printed from InvestorPlace Media,

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