SOURCE: The Bedford Report

The Bedford Report

May 06, 2011 08:16 ET

Down but Not out -- Obesity Drugs Continue Journey Towards Approval

The Bedford Report Provides Analyst Research on Arena Pharmaceuticals & Orexigen Therapeutics

NEW YORK, NY--(Marketwire - May 6, 2011) - Recent studies have shown that the chances of FDA approval for early stage drugs is dropping significantly, with medication designed to treat obesity being one of the least likely to receive regulatory authorization. Obesity drug makers continue to battle through the approval process, fine tuning their potential blockbuster products, in hopes of finally earning FDA approval. The Bedford Report examines the outlook for companies in the Biotechnology Industry and provides research reports on Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) and Orexigen Therapeutics, Inc. (NASDAQ: OREX). Access to the full company reports can be found at:

Over the past year, obesity drug makers have become one of the most popular speculative plays in the market. Due to the overwhelming percentage of overweight Americans, an effective and safe weight loss drug is seen to have astronomical earnings potential. The problem is that the FDA has proven to be very hesitant to approve prospective obesity drugs due to both safety and efficiency concerns. After an FDA advisory panel rejected obesity drugs from Orexigen and Arena over the last year, shares of both companies were sent plummeting.

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Arena's obesity drug, Lorcaserin, was rejected last September after a memo from the FDA stated that the drug did not satisfy the mean efficacy requirements that the FDA has laid down for obesity therapies, and additionally caused tumors in rats. The FDA stated further that it may ask Arena to conduct additional studies on the candidate in the event of Arena failing to provide further evidence to mitigate the concerns about tumors. Arena plans to re-file its application by the end of 2011 -- meaning the drug would likely not be available until 2012 at the earliest.

The FDA also dealt Orexigen a blow when regulators declined to approve its obesity drug, Contrave in the present form and issued a complete response letter (CRL). The FDA stated that it is concerned about the long-term cardiovascular safety profile of the obesity candidate and has asked Orexigen to conduct an additional study. Recent studies from Orexigen suggested reduced heart risks associated with Contrave, and says that the drug helped obese patients to maintain normal 24-hour circadian patterns over a year of treatment.

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