Orexigen Therapeutics, Inc.
) reported a net loss of 41 cents per share in the fourth quarter
of 2012, much wider than the year-ago loss of 9 cents but 4 cents
narrower than the Zacks Consensus Estimate of a loss of 45 cents
per share. Revenues remained flat year over year at $0.9 million,
in line with the Zacks Consensus Estimate.
Full-year loss came in at $1.27, narrower than the Zacks
Consensus Estimate of $1.31 but wider than the year-ago loss of
58 cents. Revenues decreased 22.1% to $3.4 million, in line with
the Zacks Consensus Estimate.
Operating expenses increased to $33.3 million during the final
quarter of 2012 from $5.2 million in fourth quarter 2011,
reflecting the increase in research and development expenses.
Research and development expenses increased to $28.3 million from
$1.5 million in the year-ago period.
The massive jump was primarily attributable to the costs for
developing its obesity candidate. General and administrative
expenses were up 39.9% to $5.1 million.
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Along with the fourth quarter 2012 results Orexigen provided an
update on Contrave. The company, which had received a complete
response letter (CRL) from the US Food and Drug Administration
(FDA) in Jan 2011 for Contrave, is planning to resubmit the new
drug application (NDA) in 2013. Orexigen is hopeful of gaining
approval in early 2014.
At the time of issuing the CRL, the FDA had expressed concerns
regarding the long-term cardiovascular safety profile of Contrave
and had asked Orexigen to conduct an additional study. The FDA
requested a randomized, double-blind, placebo-controlled trial of
sufficient size and duration which would show that the risk of
major adverse cardiovascular events in overweight and obese
subjects treated with Contrave does not adversely affect its
In Jan 2013, the company said that the Division of Metabolism and
Endocrinology Products (DMEP) has proposed a resubmission
procedure under which an interim analysis report submitted by the
independent Data Monitoring Committee of the Light Study can be
used for the resubmission of the Contrave NDA.
We note that Contrave, once launched, will be a late entrant in
the obesity market. Last year, two obesity prevention drugs were
Arena Pharmaceuticals, Inc.'s
) Belviq and
Orexigen carries a Zacks Rank #2 (Buy). Currently,
) carrying a Zacks Rank #1 (Strong Buy) looks more attractive in
the pharma sector.