Contrave’s unexpected late turn in battle of the bulge

Analysis

The US obesity market has shown little evidence of activity that might support the multi-billion dollar status that had been widely forecast some years ago. However, this could be about to change, if recent prescription data for Orexigen’s Contrave are anything to go by.  

On its fourth-quarter conference call last Wednesday Orexigen claimed that Contrave – which is still just four months into its launch – is already accounting for 27% of total prescriptions and 30% of new prescriptions in the US branded obesity market. This would put it on a sales trajectory quite unlike the recent launches of the two other oral obesity drugs.

Indeed, assuming that it is also growing the market, Contrave could be within weeks of surpassing its two longer-established rivals, Vivus’s Qsymia and Arena’s Belviq. Analysts who had written off obesity as a therapy area might yet have to review their models.

Consensus forecasts for Contrave should shortly move upwards, after having gone backwards in line with Qsymia and Belviq. Last week Leerink reinstated coverage of Orexigen with a bullish stance, based on its renewed confidence in the launch trajectory of Contrave derived from a survey of doctors.

Its survey suggested that the segment would see a doubling in prescriptions of obesity pharmacotherapy in the next 24 months, driven by the concurrent launches of Contrave and Novo Nordisk’s Saxenda, an injectable drug. 

The physicians surveyed by the bank estimated that 13.5% of their obese patients were being treated with pharmacotherapy at present, a figure that they expected to rise to almost 30% by 2017. The same physicians thought that Contrave would double its share of obesity prescriptions over the next two years.

Any updates on Contrave will take a little while to show up in EvaluatePharma consensus forecasts. These data currently suggest that the four products will achieve total sales of $320m this year, rising to a little under $1.1bn by 2018.

This might also under-state sales, as for two of the drugs the data are derived from financial models on their Japanese pharma marketing partners (Eisai and Takeda) and the sellside analysts in that country are cautious about the US obesity market. Arena and Orexigen receive royalty and other income based on sales, so this is accounted for differently.

Cut back

A look at the change in consensus forecast over 12 months is telling; all three oral products have been cut back, Contrave by the largest proportion.

By contrast, forecasts for Novo Nordisk’s injectable drug Saxenda appear to be on a sharply upward trajectory. While this could indeed reflect the product’s prospects, the change is more likely brought about by analysts including this indication as a separate line in their models for the first time; comparative data only exist for the past five months.

Is there life in the obesity market after all?
Consensus sales ($m)*
Company  Product 2015e 2018e 12mth chg in 2018 consensus*
Eisai Belviq 104 214 (34%)
Novo Nordisk Saxenda 98 369 118%
Vivus Qsymia 92 399 (23%)
Takeda Contrave 25 101 (66%)
*EvaluatePharma data

Sales of Qsymia and Belviq have fallen short of even modest expectations, as the requirement for physicians to deal with a risk evaluation and mitigation strategy (REMS) programme and/or DEA scheduling, which are present with these products, had been underestimated.

Contrave, as the third entrant, was not really expected to have an effect on this dynamic, despite it having neither a REMS nor DEA schedule IV status. The doomsayers might have been wrong after all.

To contact the writer of this story email Robin Davison in London at news@epvantage.com

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