Orexigen’s heavy price for Light miscalculation

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The other shoe has dropped for Orexigen Therapeutics, and it made a loud crash. Announcement yesterday that the Light cardiovascular outcomes trial of its weight loss pill Contrave had been terminated was accompanied not only by news that that a benefit seen in an early analysis has disappeared, but also that its US partner Takeda was threatening to scrap the deal.

Orexigen’s shares tumbled 14% yesterday and another 11% in early trading today as investors swallowed the double helping of bad news. The controversial decision to disclose the interim data widely has backfired, and it is looking increasingly like the California-based group will at least take on the entire cost of a second outcomes study demanded by the FDA (Controversial disclosure will probably benefit Contrave in the long run, March 4, 2015).

The longer view of yesterday’s unfortunate double bill is that Orexigen appears to have damaged its relationships with just about everybody. Regulators and the medical community were already angry, but now investors and Takeda are hacked off too.

What is more, its handling of the Light data must surely be giving potential ex-North American partners pause, and the cash from such a deal would come in very useful in paying for the second cardiovascular outcomes study.

Light of day

The Light executive steering committee called a halt on the 9,000-patient Light trial because of the premature disclosure of the interim analysis, conducted after 25% of the expected major adverse cardiovascular events had occurred. This interim analysis allowed Orexigen and Takeda to file for approval if the analysis found that Contrave did not double cardiovascular risk.

What it found was favourable to Contrave: a 41% reduction in events including strokes and myocardial infarctions, although this was not to be disclosed widely. Ignoring this, and going against best practices, not only did Orexigen share it with more than 100 people, including investment bankers and Takeda executives, it sought to strengthen its patent estate on this evidence.

Yesterday’s announcement disclosed that a second interim analysis, after 50% of the expected events had occurred, did not find any cardiovascular benefit for Contrave. This announcement came from the Cleveland Clinic, where committee chairman Steven Nissen practises, following separate announcements from Orexigen and Takeda.

The release quotes Dr Nissen as saying the second interim analysis demonstrates why Orexigen should not have disclosed the first, since more major cardiovascular events occurred in Contrave patients between the first and second. The patent claim now ought to be dead, and the FDA was unlikely to agree to a label claim as it was already angry with Orexigen – it had ordered the group to begin a second study because of the data breach.

Damaged relationship

Having doctors and regulators angry is one thing, but as Contrave is an approved drug the consequences of the imprudent disclosure seemed somewhat limited. Maddening a commercial partner, however, is unwise.

In an emailed statement, Takeda said it had sent a letter yesterday seeking to terminate the co-promotion deal it had signed in 2010 because Orexigen was in material breach. The statement added that Takeda was “working closely to resolve the situation”.

The two companies have been in a dispute over the costs of the second post-marketing trial, which under the partnership were to be equally shared. The timing of the dispute letter suggests that Light’s cessation was an opening to use the threat of handing back the rights as a negotiating chip in this dispute.

Orexigen probably has little choice but to go along, as Takeda’s withdrawal would entail it paying for both the trial and the Japanese partner’s promotion and marketing costs.

The unusual decision to disclose interim data had its short-term benefits in generating a share rise, but with the benefit of time it has been revealed as rash and destructive. Orexigen executives might need to go on a lengthy goodwill tour to repair the damage. They will have many stops to make.

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @JonEPVantage on Twitter

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