Orexigen Therapeutics, Inc. OREX reported a loss of 9 cents per share in the third quarter of 2015, narrower than the Zacks Consensus Estimate of a loss of 17 cents per share. The company had reported earnings of 9 cents per share in the year-ago quarter.
Total revenues in the quarter fell significantly (67.7%) year over year to $10 million, but surpassed the Zacks Consensus Estimate of $9 million.
Quarterly Details
According to Takeda Pharmaceutical Company Ltd. TKPYY, U.S. net sales of obesity drug, Contrave (EU trade name: Mysimba), in the third quarter of 2015 were $12.8 million, down 20% sequentially.
Orexigen received $2.6 million as royalties on U.S. net sales of Contrave. As per IMS Health data, Contrave scrips grew 10% sequentially to 190,201 in the third quarter of 2015. On the third quarter call, the company reported that in September, Contrave's share grew to 38% of the branded market.
In the reported quarter, Orexigen received the first of three potential $15 million anniversary milestone payments from Takeda. The remaining two payments are expected in the fourth quarter of each of 2016 and 2017.
Operating expenses increased 17.4% year over year to $20.9 million primarily due to higher general and administrative expense. R&D expenses decreased 17.7% from the year-ago period to $8.8 million. General and administrative expenses were up 70.5% to $12.1 million, mainly due to an increase in marketing and consulting costs.
Orexigen intends to commence its cardiovascular outcomes study in early 2016 with a target completion date of 2022.
Meanwhile, Kwang Dong, Orexigen’s partner in South Korea, has filed for approval of Contrave and could start selling Contrave in the second half of 2016, provided it gains approval.
Orexigen is in discussions with potential partners for the EU and other regions. The company expects to launch Mysimba in the EU in the second half of 2016.
Orexigen is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Actelion Ltd. ALIOF and Baxalta Incorporated BXLT. Both are Zacks Rank #1 (Strong Buy) stocks.
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