And the winner is…….
In a surprise move yesterday an FDA Advisory Panel voted 13-7 for approval of Orexigen Therapeutics (NASDAQ:OREX) weight loss drug Contrave. Although the panel voted in favor of approval they also noted that once approved by the full FDA, the company should run additional post-market studies to address possible safety concerns.
Orexigen was the last company with a weight loss drug to face the FDA panel, as this same panel voted against drugs from Arena Pharmaceuticals (NASDAQ:ARNA) and Vivus (NASDAQ:VVUS). Shares of all three companies are trading higher today as investor seem to believe this vote by the panel signals a shift in the FDA’s view on weight loss drugs and could help Arena and Vivus over the long term. Diabetic Investor is not that optimistic as we believe this vote is more valuable for Orexigen as they are the only company to clear this important hurdle without restrictions. While Arena and Vivus may eventually get there both companies still have hurdles to overcome. Given the huge market potential for any FDA approved weight loss drug and the obvious first to market advantage, Orexigen clearly has a leg up on their rivals.
More importantly Diabetic Investor believes this vote does signal that the FDA is finally getting back to the business of approving new drugs and that the Avandia hangover may finally be behind the agency. The simple fact is several compounds had the unfortunate experience of facing either an FDA panel or the full FDA while they we’re struggling to deal with what to do with Avandia. Now that the Avandia decision has been made, the agency is finally moving on and becoming more comfortable approving new drugs.
As gratifying as this vote was, Diabetic Investor does not believe this vote in any way signals that the agency has all of a sudden seen the errors of their ways and become less conservative. The fact remains the agency is still overly conservative in their approach and needs to get back to using scientific evidence when looking at drugs and devices. The Orexigen vote is a step in the right direction but it is just the first in a long series of steps that need to occur.
Time will tell if this vote is an aberration or truly a shift in tone. This would not be the first time the agency has taken a step forward only to revert to their old ways and take three steps back. Should the agency revisit their biggest blunder and approve Bydureon we would know the agency is serious about reform. Alias that is too much to hope for as the agency isn’t big on admitting mistakes, but they are extraordinarily adapt at making them.