Shares Of Orexigen Soar After It Announces Improved Safety Results For Weight-Loss Drug

Shares of Orexigen Therapeuetics (OREX) are up about 40% after the company reported that its weight-loss Drug Contrave did not only achieve excellent safety results but also saw improvements in other significant areas. When patients took Contrave they were observed to reduce their risk of a heart attack, reduce the risk of a stroke and/or reduce the risk of dying from heart disease. Contrave won approval from the FDA back in September of 2014 but still had to be tested in a trial to determine the safety of the drug compound.

The safety study performed by Orexigen Therapeutics is known as the "Light Study," which is running under a special protocol assessment by the FDA to prove that patients taking Contrave didn't risk their cardiovascular health. The study recruited approximately 8,900 patients across 260 sites in the United States but showed additional benefit of reducing risk of heart-related problems. Orexigen reported that the company's drug Contrave saw 35 MACE events while placebo saw 59 MACE events. These MACE events are events in which patients experience a type of heart related problem. The fact that patients taking Contrave saw a reduction of heart problems compared to those taking placebo is an added bonus in addition to losing weight.

One thing to keep in mind  is that this data is early in nature and the company is expecting to release additional data in the coming weeks. Also depending on the rest of the data it may slightly change the perspective of improved cardiovascular health. Even if the additional safety data ends up being mediocre it still allows the company to expand its patent for its obesity drug Contrave, which will allow it to hold a patent till the year 2034. Investors should hope  that the safety data continues to come in like this, because it will provide a key advantage over its competitors Arena Pharmaceuticals (ARNA) and Vivus Inc. (VVUS).

Disclosure: no position in any stocks mentioned

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