Orexigen's weight-loss drug gets thumbs-up from CHMP

Orexigen has scored another big boost for its weight-loss drug, with a European drug advisory group giving it a recommendation for approval. The favorable review comes three months after the FDA approved it in the U.S., where it is already seeing some significant demand.

Mysimba, sold as Contrave in the U.S., has won a nod from the Committee for Medicinal Products For Human Use (CHMP) for use used along with diet and exercise in treating obesity in adult patients who also have a weight-related condition like type 2 diabetes or controlled hypertension. The EU generally approves a drug a few months after a CHMP recommendation and the La Jolla, CA-based Orexigen ($OREX) said that it expects to see that early next year.

The recommendation came with the caveat, however, that if patients haven't lost at least 5% of their body weight after 16 weeks, that the drug be stopped. That is because of unknown but potential cardio risks after prolonged use, CHMP explained in its announcement.

The FDA had similar concerns and tagged it with a black box warning, a move that can dampen sales of any drug. But early signs in the U.S., where the drug is being marketed by Japan's Takeda, have been promising. A direct-delivery program, set up in anticipation that some payers would not cover the drug, was so successful that demand swamped a website and call-in service, creating delays in getting prescriptions filled.

There is growing anticipation that weight-loss drugs, that in the past failed to meet oversized expectations, may be ready to turn in blockbuster-sized sales. Arena Pharmaceuticals ($ARNA) and Eisai, which sell Belviq, and Vivus' ($VVUS), which has Qsymia, are small companies whose drugs have seen small sales. Belviq brought in just $25 million in sales during the year ended in March, while Qsymia sales for 2013 were just $23.7 million.

But analysts are expecting bigger things from Contrave, and from a drug for which Novo Nordisk ($NVO) is awaiting approval in the U.S., Saxenda. There is a hope that the expertise Takeda and Novo have in weight-related conditions like Type 2 diabetes will give doctors and payers confidence to prescribe and cover drugs as a way to prevent or help deal with the obesity problems in the world. Wells Fargo analyst Matthew Andrews predicts Contrave will bring in $634 million in sales in 2020, but has forecast that figure could be as high as $1.2 billion if Orexigen wins approval for the drug in treating diabetes.

- read the CHMP announcement
- here's the Orexigen release

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