OREX

Orexigen Therapeutics, Inc. (OREX)

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Orexigen Therapeutics Inc. (OREX)

Special Conference Call

September 13, 2012 8:45 am ET

Executives

Michael Narachi – President, Chief Executive Officer

Jay Hagan – Chief Financial Officer

Mark Booth – Chief Commercial Officer

Analysts

Presentation

Moderator

All right, good afternoon. My name is Steve Byrne. I cover the small and mid-cap (inaudible) stocks in the States. It’s my pleasure to introduce the Orexigen team. We’re graced with three of their managers here – Mike Narachi, CEO, we have Mark Booth, Chief Commercial Officer, and Jay Hagan, CFO, so we’ve got quite a team here. So it’s all yours, Mike.

Michael Narachi

Yeah, thanks for inviting us and thanks for your interest in Orexigen, and probably if you’re interested in Orexigen you’re interested in the obesity space. It’s evolving rapidly over the last year or so, and I think the pace of new information and are we meeting or beating expectations is going to continue here over the next couple of years.

I’ll be making forward-looking statements today, and if you don’t mind I’ll sit so I can use my glasses and see the screen. I won’t try and read this – obviously lots of forward-looking statements. Things materially change in the future, and all of our documents are on file on our website and with the SEC.

In general, we have two late-stage obesity therapeutics. One’s been reviewed by the FDA and we got a complete response that asked us to rule out cardiovascular risk. The other has completed Phase IIb. We raised the capital, we started our large cardiovascular outcome safety trial, and we’re getting ready now to resubmit in the U.S. and submit in Europe and synchronize those approval processes so that we can then cascade into global approvals. We have a North American commercial partner in Takeda that’s committed to heavy resourcing of a blockbuster primary care launch when the approval comes, and we’re in the process of seeking a rest-of-the-world partner to commercialize Contrave. And our second product, Empatic, we have to make some strategic business decisions on how best to develop that, but our default position would be to put that into a rest-of-the-world partnership agreement and use some of those partner dollars to fund the development and probably not start Phase III development of that second product until rest-of-the-world commercialization partners are brought on board. We would expect that partnership to come together in the highest value-creating way for Orexigen around the same time that we have data from the cardiovascular outcomes trial.

Let’s talk a little bit about the path to approval in the U.S., and the European authorities have also indicated an interest in seeing cardiovascular data prior to our approval, so I think the data from the light study interim analysis will be necessary to go forward with Contrave. So in our NDA review by the FDA, there was only a single approval deficiency. Everything else, the boxes were checked but they wanted us to rule out excess cardiovascular risk with a large outcomes trial that was a placebo controlled randomized trial. We took about nine months with the FDA, unfortunately, to clarify what ruling out excess risk meant, and that led to the design of the light study so it was confirmed through a formal dispute resolution process with the FDA, so we got a very high level commitment to the parameters that would guide approval from the Director of the Office of New Drugs. Dr. Don Jenkins led that reply to our appeal.

And then with the review division, we worked out a special protocol agreement in very short order so that we had top-to-bottom alignment at the FDA of exactly what it’s going to take to drive this assessment of cardiovascular risk for an obesity therapeutic like Contrave, and that assessment essentially mirrored the diabetes guidance. We have to rule out a certain amount of risk to get approval with an interim analysis, and then you finish the study and rule out excess risk. And the risk that they’re asking people to rule out, and now the Europeans have actually adopted very, very similar guidance for diabetes drugs, where what they’re saying is the benefits that are presumed from lowering blood sugar for diabetes drugs or lowering weight with obesity drugs should outweigh at least 16 excess cardiovascular events – heart attack, stroke, cardiovascular death – to get approved. And then it should rule out at least six excess events per thousand years of exposure, so it’s a pretty tight hurdle for safety. We want to make sure there is not any more than 16 to get approved and 6 per thousand years of exposure, and the benefits clearly outweigh that in their mind. Now, that’s a subject decision.

Then you translate that into the statistics for the studies on where you need to rule it out on a hazard ratio basis, and I’ll go through that. But our trial essentially mirrored the diabetes guidance for absolute risk, the relative risk or the hazard ratio scores, then we need to rule out a doubling of risk for approval and a 40% increase in risk for the final analysis. An event-driven trial, so that means we need about 87 events to do that with high confidence for the interim analysis, and the trial is basically a very simple, straightforward study that’s tracking heart attack, stroke and cardiovascular death. That’s the primary and secondary endpoint, and an intent to treat basis.

Read the rest of this transcript for free on seekingalpha.com