When Orexigen Therapeutics' obesity drug, Contrave (now called NB32), was turned down by the Food and Drug Administration in January 2011, it looked like the company could fall to a distant third behind competitors Vivus and Arena. Now, an FDA decision on Contrave is expected by Wednesday, and analysts say its third-place arrival on the market may actually work in its favor.
Orexigen was required to start a multiyear study on the cardiovascular safety of its medicine before reapplying for FDA approval. Meanwhile, Vivus and Arena secured clearance of their drugs, Qsymia and Belviq, in 2012. (They have to do post-marketing studies to monitor safety.)
In a field plagued by safety concerns and development hiccups, Belviq and Qsymia were the first drugs for obesity cleared in the U.S. in 13 years. And given that more than a third of adults in the U.S. are obese, according to the Centers for Disease Control and Prevention, expectations for sales of the two drugs were high, as analysts saw a large market in need of options.
So Vivus and Arena should be going gangbusters, right? Wrong.