Tomahawk, WI 09/12/2014 (Basicsmedia) – Orexigen Therapeutics, Inc. (NASDAQ:OREX) stock sunk in Thursday trading session by highs of 10.51%, despite the company gaining approval for Contrave, a weight-loss contraceptive pill. The drop according to CNBC’s Meg Tirrell could in some way be attributed to the company announcing it was planning to raise more money, to cater for a second wave of cardiovascular trials.

Contrave is only the third diet pill to gain approval from the FDA for more than a decade. It is’ made of bupropion, which is an antidepressant and the company’s formulation naltrexone that can suppress drug dependency.

“The Orexigen Therapeutics, Inc. (NASDAQ:OREX) has a lot of post-marketing requirement in terms of safety studies that they have to run which isn’t a huge surprise to investors. They already knew it was going to come but one thing that they said they are going to run a second cardiovascular outcome trial which some investors might not have been expecting, and that can cost up to $200 million, “said Mrs. Tirrell.

Orexigen Therapeutics, Inc. (NASDAQ:OREX) CEO, Michael A. Narachi, is quoted as saying that the second wave of trials may be of benefit to Orexigen especially if it results in approval for the upcoming type 2 diabetes drug. Approval for Diabetes may even be a bigger business opportunity for the company compared to Contrave.

Safety concerns that may erupt with further studies according Tirrell may also be one of the reasons why the stock plummeted in the market. Investors might have been reacting especially after Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), and VIVUS, Inc. (NASDAQ:VVUS) drugs released back in 2010 failed to live up to the hype, only generating between $100 and $150 million as opposed to initial sales estimates of up to a billion.

“[…] What’s interesting about Orexigen is out of the three obesity companies it has got the most buys from analysts you see Arena with an average hold rating and Vivus has an average sale rating. The reason they like Orexigen because in partthey’ve got 900 sales reps they plan to sell this drug with, “said Mrs. Tirrell.


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