The European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) gave a positive opinion on the approval of Orexigen Therapeutics’ (OREX) weight loss drug, Mysimba.
The drug was recommended as an adjunct to a reduced-calorie diet and physical activity for chronic weight management in obese (Body Mass Index, or BMI, ≥ 30 kg/m2) or overweight (BMI ≥ 27 kg/m2) adults suffering from at least one weight-related co-morbid condition including type II diabetes, dyslipidaemia or controlled hypertension.
The European Commission is expected to render final decision on the approval of Mysimba in early 2015. We note that though the European Commission is not bound to follow the CHMP’s decision, it generally does so.
We remind investors that Mysimba is already available in the U.S. under the trade name Contrave from Oct 2014. The drug was approved in the U.S. in Sep 2014 (read more: Orexigen's Obesity Drug Contrave Approved by the FDA).
We note that the company has a collaboration agreement with Takeda Pharmaceutical Company Ltd. (TKPYY) for the development and commercialization of Contrave in North America.
Our Take
The favorable CHMP opinion on Mysimba is a positive for Orexigen. With the drug already launched in the U.S., an EU approval will further boost its sales potential.
However, the obesity market already has products like Qsymia and Belviq. It will be interesting to see how Mysimba/Contrave competes with these products. We expect investor focus to remain on the drug going forward.
Orexigen carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Amgen Inc. (AMGN) and Biogen Idec Inc. (BIIB). Both the stocks hold a Zacks Rank #1 (Strong Buy).
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