Contrave Wins Approval Recommendation In Europe

Spencer Osborne profile picture
Spencer Osborne


  • Contrave will be marketed as Mysimba in Europe.
  • Regulators have recommended approval.
  • The European Commission will likely adopt the recommendation in early 2015.

Orexigen (NASDAQ:OREX) was able to accomplish what Arena (ARNA) and Vivus (VVUS) could not. The company announced this morning that its anti-obesity drug, which is marketed as Contrave in the United States and will be marketed as Mysimba in Europe, received a positive recommendation by CHMP, the EU regulating body that assesses prescription drugs. With a positive recommendation in hand, the adoption by the European Committee is expected in early 2015. Qsymia from Vivus was rejected by CHMP, and Arena pulled its application for Belviq when it was apparent that a rejection was the likely outcome based on concerns outlined by CHMP.

The news of the positive CHMP recommendation is meaningful for Orexigen in a few ways:

  • The company will be the only "new" anti-obesity drug sold in Europe. A second drug was approved in 1998.
  • The company has retained all rights to Europe. This means that Orexigen has options. It can do it alone and reap all of the revenue, or seek out a partner and garner an up-front sum worth multiple millions.
  • Knowing that it will have Europe to itself (at least for the time being) could allow the company to be even more aggressive in marketing Contrave in the United States.

Certainly a topic of discussion in the sector will be what was it about Contrave that allowed a positive recommendation, while Qsymia and Belviq failed? The answer is not an easy one, but it would appear that the risk vs. reward assessment was seen as favorable. In contrast, Qsymia contains phentermine, banned in Europe, while Belviq was viewed as not having a risk vs. reward profile that was favorable. Perhaps the big difference here is that the Orexigen supplied interim heart safety data to the panel. The CHMP opinion was based on the results of four Phase 3 clinical trials evaluating Mysimba in more than 4,500 overweight and obese patients including a dedicated clinical trial in obese patients with diabetes. The CHMP also reviewed the interim analysis of the Light Study, a cardiovascular outcomes safety trial with more than 8,900 patients evaluating the effects of Mysimba on heart attack, stroke and cardiovascular death.

"The prevalence of obesity has more than tripled in many European countries in recent decades, and this rise in obesity has been accompanied with an increase in comorbid conditions including diabetes, cardiovascular complications, and fatty liver disease," said Nicholas Finer, BSc (Hons), MBBS, FRCP, Honorary Professor, National Centre for Cardiovascular Prevention and Outcomes, University College London Institute of Cardiovascular Science. "New treatment options are sorely needed in Europe where there is currently only one prescription drug available for weight management, a lipase inhibitor, which was approved in 1998. I am pleased the CHMP adopted a positive opinion for Mysimba after a careful assessment of its benefits and risks."

Orexigen is up sharply in pre-market trading on the news, and that rise may continue as possible new catalysts present themselves. The biggest possible catalyst is whether or not Orexigen will seek out a partner in Europe. The likely leader in a possible courtship would be Takeda, which is the marketing partner in the United States. Orexigen has been on sale in the U.S. since late October and has had an impressive launch thus far.

A date for the European Committee to finalize this decision has not been set, but certainly will be a news item to watch for in early 2015. Stay Tuned!

This article was written by

Spencer Osborne profile picture
Spencer Osborne assesses equities in a data supported realistic manner that is often missing in analysis that the average retail investor receives. His analysis is what investors NEED to hear rather than what they WANT to hear. He believes that the foundation of an equity price is based on what is probable rather than what is possible, and the trade focuses on possible near term catalysts and news. Smart investing is understanding how the market works and how that market mentality impacts a given equity. Spencer believes that investors should model their expectations and maintain a critical eye on whether those expectations are being met. If an invesor finds herself making excuses for missing the mark, then they are losing objectivity.

Disclosure: The author is long ARNA. I have no position in Vivus or Orexigen. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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