The root of Orexigen's Contrave data blunder: CEO's 'I have to see it' choice

Orexigen CEO Mike Narachi

A couple of years back--before Orexigen's ($OREX) recent data leak landed it in hot water with regulators, researchers and marketing partner Takeda--CEO Mike Narachi said he believed data from a large cardiovascular outcomes study should be kept among "a small team." But he also believed he should be on that team.

In a 2013 interview with Forbes' Matthew Herper, Narachi acknowledged the importance of keeping early results under wraps. "The people who have seen this cannot be involved in the ongoing conduct of the study," he said. "You unblind a small team, and they are no longer involved in the trial conduct."

But Narachi also made it clear that he needed to see the data, telling Herper it was "necessary for certain members of management to see this" because of Orexigen's size.

"I don't want to put my team in a position of [having to make decisions without me], Me as a CEO of a small team, I have to see it," he said.

As Forbes points out, once Narachi knew about the data--which seemed to suggest Contrave could ward off major cardiac events like heart attack and stroke--he may have felt obligated to file for the patent that took the info public and jeopardized the study.

Cleveland Clinic's Steven Nissen

And that's precisely why Narachi shouldn't have been privy to the data in the first place, according to outspoken Cleveland Clinic investigator Steven Nissen, who led the trial.

"Mike Narachi said, 'If we hadn't put these data into a patent I would no longer be CEO of the company,'" Nissen told Herper. "There's a problem with that, which is that their board and he should never have seen the data! They wouldn't have been put into a compromised situation if they hadn't violated the agreement."

Regardless, Narachi and Orexigen now have some big consequences upon them. To satisfy the FDA's postmarketing requirements, they're still on the hook for an outcomes study--and the new trial, which Nissen will also lead, could ring up at about $200 million, analysts predict. To make matters worse, Takeda--which is none too happy with Orexigen's moves--thinks the biotech should pick up the tab itself.

And meanwhile, it'll have to do so with the knowledge that the rosy interim analysis--the one that inspired Orexigen to blab the results in the first place--all but disappeared by the 50% mark. At that point, the drug had posted only a 12% decrease in major cardiac events--one that wasn't statistically significant, researchers said.

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