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Orexigen Therapeutics (NASDAQ:OREX)

Orexigen Receives Three Month Extension of FDA NB32 Review

June 11, 2014 08:00 AM ET

Executives

Heather Turner - VP & General Counsel

Mike Narachi - President and CEO

Preston Klassen - SVP of Development

Analyst

Steve Byrne - Bank of America Merrill Lynch

Marko Kozul - Leerink Partners

Charles Duncan - Piper Jaffray

Cory Kasimov - JPMorgan

Lee Kalowski - Credit Suisse

Mathew Andrews - Wells Fargo

Operator

Welcome to the Orexigen Conference Call. My name is Joan and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that the conference is being recorded.

I will now turn the call over to Heather Turner. You may begin.

Heather Turner

Hello and thank you for joining us this morning. I am joined on this call by Mike Narachi, Chief Executive Officer; Mark Booth, Chief Commercial Officer; Dr. Preston Klassen, Senior Vice President of Development; and McDavid Stilwell, Vice President of Corporate Communications and Business Development.

Please note that all of the information discussed on the call this morning is covered under the Safe Harbor Provisions of the Private Securities Litigation Reform Act. I caution listeners that during this call the company’s management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company’s business.

These forward-looking statements are qualified in their entirety by the cautionary statements contained in today’s press release and the company’s SEC filings, including the Form 10-Q, the company filed on May 9, 2014. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, June 11, 2014. Orexigen undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

I will now hand the call over to Mike Narachi, Orexigen’s Chief Executive Officer to provide an overview of today’s call.

Mike Narachi

Thank you, Heather, and thank you for joining us today. As we announced this morning, the FDA has extended the review of the NB32 NDA. The new PDUFA action date has been set for September 11, 2014. FDA indicated that this extension is needed to reach agreement on post marketing obligations related to the previously agreed upon evaluation of cardiovascular outcomes of NB32. As you may recall we submitted our NDA six months ago which contained an unprecedented amount of preapproval safety information for obesity therapeutic. The resubmission included interim safety and cardiovascular outcomes data from the ongoing 8900 patients’ Light Study. The FDA has been working very diligently on this application and we are in active dialogue. Discussions around the package insert and post marketing obligations are ongoing. We are encouraged by the high-level of engagement with FDA and are confident that we can reach agreement with the FDA to close out on the remaining items for the review.

I'll now turn the call over to Preston to provide some additional detail.

Preston Klassen

Thanks Mike. As was outlined in the press release the three-month extension will give FDA and Orexigen additional time to reach agreement on any post marketing obligations for continued evaluation of cardiovascular outcomes. This issue came up late in the review as post marketing requirement discussions typically do and this is the issue we are focused on with the agency in order to complete the review. The reason that this will take more time is our need to discuss and agree on the most appropriate plan for any post marketing requirement on cardiovascular outcomes. One of the complexities that must be addressed in these discussions is required data transparency and disclosure at both regulators and company space and the implications for ongoing blinded trial that may form the basis to fulfil any post marketing obligations.

Taking a step back and according to the public record, the need for dialogue with the agency on these matters has occurred in other recent reviews of diabetes drugs where sponsors use interim data from ongoing blinded trials to pursue approval. In one of these cases the ongoing trial continued and fulfilled the post marketing requirement. This has been the plan to pass for Contrave and the Light Study.

In another case the trial was unblinded after the interim analysis and a new trial formed the basis of the post marketing requirement. In both cases data disclosure was an important topic discussed in the review and ultimately agreement was reached regarding post marketing obligations. We are working expeditiously with the FDA to finalize a review. We are encouraged by the high level of engagement with the FDA and we are optimistic that we will come to an agreement by September 11.

I’ll now turn the call back over to Mike.

Mike Narachi

Thanks Preston. While we're disappointed that we cannot conclude the review by our June 11 PDUFA date, I’m confident we'll get the job done. Our partner Takeda is making the necessary adjustments and is ready and eager to launch. I would also like to highlight that things are progressing with our MAA review in Europe and we expect to receive our Day 180 feedback by late July. Before opening the call up for questions I'll like to last for your understanding relating to the details of our ongoing dialogue with FDA. The dialogue over the specific post marketing obligation needs to take place between the agency and our self. Therefore, we won’t be commenting on the status of these discussions beyond what was said today.

We'll now open the call up to your questions, operator?

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) We have Steve Byrne on line from Bank of America Merrill Lynch; please go ahead.

Steve Byrne - Bank of America Merrill Lynch

Was just wondering whether or not that -- an additional wrinkle in this transparency might come up from the patent application that you filed based on data from the first interim analysis and when you know the prosecution of that might lead to a disclosure of that application and is that also an additional mechanism to disclose data that could or could not conflict with what you’re trying to earn out with the agency right now?

Mike Narachi

Yes, thanks for the question Steve. As we said we don’t want to pre-empt discussions that are happening between Orexigen and the agency. The need for disclosure from company spans lots of areas and the need for regulators and governmental agencies as well. We filed those patents I think right now that’s not something that’s in the mix I think what we will have to wait and see what happens if and when those issue and what implications those may have on data disclosure in the future.

Steve Byrne - Bank of America Merrill Lynch

And just a question on the second interim analysis if it took roughly a year after roughly full enrolment to reach that first interim analysis is it reasonable to assume another year to reach that 50% of events point or do you expect that the event rate might slow?

Preston Klassen

Hi Steve this is Preston. That’s a reasonable approximation, typically event rates don’t change over time and so that’s a reasonable approximation.

Steve Byrne - Bank of America Merrill Lynch

And just lastly on that are there stopping rules associated with that second interim analysis that did not exist with the first interim analysis?

Preston Klassen

We do have starting with the second interim analysis we do have pre-specified stopping rules for superiority.

Steve Byrne - Bank of America Merrill Lynch

Okay, thank you.

Operator

Thank you. Our next question comes from Marko Kozul from Leerink Partners. Please go ahead.

Marko Kozul - Leerink Partners

Hey guys. Good morning. Understanding that you probably can make so many comments about quality of data disclosure in negotiation with the FDA, can you comment maybe a little bit more on where you are with post actually with negotiation or other aspects of the label and whatever we might see a faster resolution than the three month PDUFA extension?

Preston Klassen

Yes sure this is Preston again. We are pleased with the rest of the review, we’ve had discussions around the package insert and other post marketing obligations, those discussions are on-going and as I said earlier, finalizing this post marketing obligation for excluding cardiovascular risk is the issue we’re now focused on to complete the review.

Marko Kozul - Leerink Partners

Terrific, thanks for taking my question.

Operator

Thank you. Our next question comes from Charles Duncan from Piper Jaffray. Please go ahead.

Charles Duncan - Piper Jaffray

Good morning guys thanks for taking the question. First of all I am wondering if this has anything to do with the actual observation made in the interim analysis, do you think a different observation may have not resulted in this or is this just really kind of process consistent with what you outlined in your comments regarding the diabetes drugs.

Preston Klassen

Hi Charles this is Preston again. As we’ve mentioned first of all the short answer is absolutely not, we’ve mentioned before whenever you use an interim analysis for an on-going blinded trial, that analysis is used to support approval, this is one of the complexities you face, how to address data transparency and disclosure requirement and that applies to both regulators and companies alike. And so that’s exactly the issue that we’ve engaged with the FDA in for this post marketing obligation and we’re very encouraged with the level of engagement we have with FDA.

Mike Narachi

Yes just to be clear Charles, I am not sure I fully understand the question but I want to make sure that this is not about an issue we have with the data, this is not something a signal in the data that’s causing a delay, it’s about posing on this post marketing obligation.

Charles Duncan - Piper Jaffray

Yes, that’s exactly my question. Thanks. And then if you could offer a probability, if you had to throw a dart on having to conduct an additional trial is there a low probability, what’s your thought on this?

Preston Klassen

Sure. Again that’s getting into different scenarios, potential solutions we’ve already given a few examples of how this has played out in recent approvals for the diabetes drugs and so getting into that level of detail which is something we’re not going to go into at this time we wouldn’t want to pre-empt any discussions we have with the FDA.

Mike Narachi

But Charles I will say that obviously we've thought about and (precedent) cases for a range of options and Orexigen is ready and eager to close out on this undoubted with the FDA and any number of solutions are viable and acceptable to Orexigen.

Charles Duncan - Piper Jaffray

And then final question off topic a little bit but can you provide any update on how things are going with the European MAA?

Mike Narachi

Sure I can. Our MAA is proceeding according to schedule, we’ve submitted the responses to day 120 questions and that basically puts our day 180 response coming up at the end of July. So as we’ve said before, that should put us on track to receive some form of CHMP opinion in the second half of the year.

Charles Duncan - Piper Jaffray

Thanks for the added color.

Operator

Thank you. Our next question comes from Cory Kasimov from JPMorgan. Please go ahead.

Cory Kasimov - JPMorgan

Hey, good morning guys. Thank you for taking my questions. I guess first one, are you trying to get interim data from the Light Study (installable) [ph]? And if so, is that playing into this at all?

Preston Klassen

This is Preston. No that’s not a factor; we would not anticipate getting interim data for this kind of trial that's on-going and blinded into the label.

Cory Kasimov - JPMorgan

Okay. That’s what I thought. All right. And then you referred to two examples of similar situations for diabetes drugs, can you name the specific drugs, I mean I know it's something we can look up but you can just name them now?

Preston Klassen

You know I think its part of the public record it is really not our business here to get into specific examples with other companies, other products. We primarily wanted to point out that this is first and foremost a complicated issue. It’s an issue that has risen as you move into a two stage risk exclusion paradigm, that it has been the case with diabetes drugs since 2008. And the primary point is that all of these situations tend to be unique. They are important issues to wrestle with and in each case the sponsor and the FDA were able to come up an appropriate solution. So we’re confident that we have the right kind of engagement at the right level with the FDA. And we do believe that we can resolve this issue in the extension timeframe.

Cory Kasimov - JPMorgan

Okay. And then if this were to go along the lines of the second example you cited where the trial was unblinded and then a new trial began post marketing. Can you remind us in your agreement with Takeda who would pay for this study, if you stop an unblinded light and then ran another CV study post approval?

Mike Narachi

Yes. Mike thanks for the question. The cost sharing for development would be governed by the agreement which we summarized in the past. But generally, preapproval development cost is 100% on Orexigen and post approval is 75-25 roughly depending on the circumstance, 75 Takeda 25, Orexigen and safety studies are 50-50. So those details have been outlined before but, I think the solutions that are available for this don’t really change things in the long run either way from our objectives.

Cory Kasimov - JPMorgan

Okay. Thank you.

Operator

Thank you. We have Lee Kalowski online from Credit Suisse. Please go ahead.

Lee Kalowski - Credit Suisse

Great. Thank you. I was wondering if you can maybe just clarify Preston so when you’re providing the examples of diabetes drugs, it sounded like there were some different ways that FDA handled the unblinding. So can you just clarify that some of these options are now on the table and what the SPA, if anything contemplated this. I guess it sounded like previously, you had SPA employees which handled how the Light Study would be conducted and I guess the assumption was that, this had already sort of been handled thus far as how you would go from the interim to the final while the trial would still be blinded, maybe you could help clarify this a little bit?

Preston Klassen

You know in terms of options on the table and how we’re going to progress those discussions with the FDA is just a level of detail we’re not going to get into at this time. I do not want to pre-empt the discussions. This has been relatively late issue in the review and while we have had interaction with the FDA, there’s basically been short amount of time to do that. So we were unable to complete the discussions around this topic prior to the June 11 PDUFA date. So I just don’t want to pre-empt those discussions.

Lee Kalowski - Credit Suisse

Was any of this covered by the SPA?

Mike Narachi

Yes. Lee this is Mike. Yes, obviously the plan for the Light Study was that it will be on-going and remain blinded. That’s the way the trial is designed. And as Preston outlined there are complexities that just need to be discussed and it requires a dialogue, it required the dialogue in the three cases that have been in front of the FDA already, where interim data for on-going blinded trial uses the basis of approval. And those cases just show that the dialogue is necessary and there are some balancing of disclosure with trial data integrity, trial integrity and data integrity issues, it just needs to get work through.

Lee Kalowski - Credit Suisse

Okay. And as far as the three months delay here and clearly that the approval triggers a fairly sizable cash milestone, you feel comfortable with the cushion for the three months?

Mike Narachi

Yes. We feel comfortable. We’re sitting good on our cash balance and expense basis.

Lee Kalowski - Credit Suisse

Okay. Thank you.

Operator

Thank you. Our last question comes from Mathew Andrews from Wells Fargo. Please go ahead.

Mathew Andrews - Wells Fargo

Hey, good morning. Thanks for taking the questions. To the extent you can, could you describe in your view the level of comfort with the agency with Contrave CV profile based on the light data, compared to back 2011 to 2012, as you were negotiating the study, is there anything you could say relative to whether or not you sense they are more comfortable with the profile to date based on the Light Study.

Mike Narachi

Preston?

Preston Klassen

Yes. I don’t think it’s appropriate to try to characterize the FDA’s opinion in an on-going review, but I do want to make sure that everyone knows that Orexigen is confident that data generated to date in the NB32 program, and confident that those data support a stable benefit risk assessment. We have previously announced, as you know that the interim analysis from the Light Study did meet the prespecified threshold that was agreed upon and required to support approval, and we announced that there were no new safety signals from the interim analysis. So the remaining issue that we're focusing on is agreement on this post marketing obligation for continued evaluation of cardiovascular outcomes. And we are confident we can get to that agreement in the extension timeframe.

Mathew Andrews - Wells Fargo

Okay and then just one last question, any reason to believe FDA could theoretically decide to say, well we want to wait to see the interim analysis based on 50% of events or 25% is sufficient, is just the issues you’ve outlined today.

Mike Narachi

Yes, we don’t have any reason to -- where we're focused right now is on this issue of discussing a post marketing obligation and the complexities around that just as they relate to date or disclosure for ongoing blinded trials. So it's really focused there. To your earlier question, it’s not a data issue, per se it’s not -- we said no new safety signals. We've turned in an unprecedented amount of safety information for an obesity therapeutic, and as far as the solution of where we go from here; we are in the dialogue now. We don’t want to pre-empt that dialogue.

Operator

Thank you. I will now turn the call over to Mike Narachi for closing remarks.

Mike Narachi

Thank you very much for joining us today on the call. We look forward to providing progress reports on upcoming quarterly conference call. Thanks again for your support and your attention. Talk to you soon.

Operator

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.

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