Orexigen Therapeutics, Inc. (NASDAQ:OREX) revealed today that the U.S. Food and Drug Administration has pushed back issuing a decision on approval for its new weight loss drug. The agency said it is extending its review of Orexigen’s new drug application and has pushed back the Prescription Drug User Fee Act action date to Sept. 11. The FDA had been planning to issue a decision on that today.
Why the delay?
The FDA said it pushed back the approval date because it was working on reaching an agreement with Orexigen Therapeutics, Inc. (NASDAQ:OREX) about post-marketing obligations for the weight loss drug. The resubmitted new drug applications from Orexigen includes data on safety and CV outcomes from the current patient Light Study, which is going on now. The drug maker and the FDA are also discussing the package insert that will be included with the drug.
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“We are working expeditiously with the FDA finalize the review,” said Michael Narachi, CEO of Orexigen Therapeutics, Inc. (NASDAQ:OREX), in a statement. “We are encouraged by the high level of engagement with the FDA, and are confident that we can reach agreement on the remaining post-marketing obligation.”
Possible link between Orexigen and Vivus?
You may remember that a mystery firm called Aspen Investment Fund recently said it might make a bid for Orexigen Therapeutics, Inc. (NASDAQ:OREX) competitor VIVUS, Inc. (NYSE:VVUS). Vivus also makes a weight loss drug, and its shares popped by as much as 1% today after the bad news from Orexigen. Interestingly enough, the date Aspen provided in its filing with the Securities and Exchange Commission was June 13—three days after the FDA was supposed to rule on Orexigen’s weight loss drug, which some believe will do better than Vivus’ Qsymia, which has largely been a flop.
So was the timing of Aspen’s deadline meant to coincide with the FDA decision about Orexigen’s competing drug? We’ll probably never know.
Will Aspen bid for Vivus?
We’ve discussed a number of possible issues with Aspen’s bid for VIVUS, Inc. (NYSE:VVUS), with the main one being that the firm doesn’t actually own any shares of the drug maker. Its entire stake is in options and contracts, so it might never own any shares of Vivus. Also it’s unusual for a firm to reveal so early that it might make a bid, and it was never bound by its statement that it might bid for Vivus.
Last month, a Motley Fool contributor noted that it seems unlikely a firm would offer a 33% premium for VIVUS, Inc. (NYSE:VVUS), which doesn’t seem to have any extremely promising drugs. Meanwhile Orexigen Therapeutics, Inc. (NASDAQ:OREX)’s weight loss drug appears to show more promising results than Vivus’ drug, which is already on the market. As a result, it’s possible Orexigen’s drug will become the one of choice while Vivus’ Qsymia just fades into the background, making Vivus seem like a very unlikely acquisition target.