Orexigen(R) CFO to Resign After Contrave Rejection

About a week after Orexigen^® announced cuts of about 40% of their workforce in the aftermath of the FDA's response letter requiring further studies bfore Contrave^® could be approved, Graham Cooper, senior vice president, Finance, CFO and treasurer has announced that he will resign.

Cooper, who has been with Orexigen^® since 2006, is leaving for personal reasons. He will remain in his current position until the year-end results are in and the annual report has been filed with the Securities and Exchange Commission. Jay Hagan, who is the senior vice president, Corporate Development and Strategy, will take over as the interim CFO.

Orexigen Therapeutics, Inc. (OREX) stock price closed the week at $3.29.

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Orexigen Cutting Jobs to Conserve Cash

Orexigen^(R) Cuts Jobs Due to FDA Response Letter

Orexigen^(R) Therapeutics, Inc. staff will be reduced by about 40% to conserve cash after the Food and Drug Administration didn't approve Contrave^™ requesting further studies on the long term effects of the drug on patients' cardiovascular systems. Mike Narachi, Orexigen's CEO, stated in a press release "We continue to believe in the potential of Contrave and look forward to discussions with the FDA. Unfortunately, given the near term uncertainty of Contrave^™ approval, we felt it prudent to consolidate and focus our resources. We are deeply grateful for the dedication and tremendous effort provided by all of our colleagues who are impacted by this realignment."

As expected, Orexigen's (OREX) stock price took a hit after the FDA decision, dropping from the $8-9 range back to under $2.50 before coming back to Friday's close of $3.32.

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Contrave Diet Pill Approval Denied by FDA

Orexigen, the developer of the weight loss pill, Contrave™, announced that the Federal Drug Administration has issued a response letter on Contrave™. In the letter, the FDA showed concern over the possible long term effects of the naltrexone HCl/bupropion HCl combination drug on the cardiovascular systems of obese/overweight people who would be the primary users of Contrave™.

The FDA is requiring that a long term study be done and were quoted "before your application can be approved, you must conduct a randomized, double-blind, placebo-controlled trial of sufficient size and duration to demonstrate that the risk of major adverse cardiovascular events in overweight and obese subjects treated with naltrexone/bupropion does not adversely affect the drug's benefit-risk profile."

Expectations are that this requirement will push out possible approval of Contrave™ several years. Orexigen's stock (OREX) began the day at $9.09 and after the disapproval ended the day at $2.50, down 72.5%.


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