Orexigen (NASDAQ:OREX) announced earnings this week. The financials were in line with expectations, but the bigger news of the company with an as yet approved anti-obesity drug was the outline of plans regarding getting approval in Europe. Orexigen will likely be the third player to the recent upswing in prescription anti-obesity drugs. Competitor Vivus (NASDAQ:VVUS) launched Qsymia in the Fall of last year and Arena (NASDAQ:ARNA) launched Belviq 2 months ago. Neither competitor has approvals in Europe.
The move by Orexigen is interesting in that it appears that the company may be shooting for a first in market status in Europe. Vivus' Qsymia was rejected and lost an appeal, while Arena pulled its application because it was unable to address questions/concerns with its application in a timeframe that would avoid its own rejection. Vivus, under new management is re-focusing on Europe, while Arena has shifted gears to Asia and other markets and has not given much information on the status of the reapplication in Europe.
For Orexigen, already behind the proverbial curve in the U.S., the application for Europe makes sense. The company still has a lot of work to do, and must submit additional study results, but the process is underway and it can be argued that Orexigen's Contrave could be first to market there.
"We are pleased with recent progress toward the Contrave MAA for Europe. From our interactions with multiple regulatory authorities in Europe, including with the assigned rapporteur and co-rapporteur, we believe European regulators recognize the need for new obesity therapeutics and support our plans for submission of the Contrave MAA," said Michael Narachi, Chief Executive Officer of Orexigen.
For the quarter Orexigen reported a net loss of 19 cents per share, an improvement over the 25 cent loss last year and in line with analysts expectations. Revenues came in at $900,000 and were also in line with the street.
Orexigen remains a speculative play. The anti-obesity space is a substantial market, but this far sales of the newer prescription drugs have been much more modest than many had initially forecast. A lack of insurance coverage has been a major hurdle to the bottom lines of Vivus and Arena, though Arena is just getting started on its sales. Transparency on issues like the European application are the fuel to the stock price fire right now. There is a lot riding on successful results in a cardiovascular study, and answers could be available by late 2013 or early 2014.
Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I have no position in Vivus or Orexigen