Shares of Orexigen Therapeutics Inc. continued to fall Wednesday amid a tangle of negative headlines following the decision to terminate the ongoing cardiovascular outcomes trial (CVOT) for obesity drug Contrave (naltrexone and bupropion), as clinical investigators criticized the company's early release of data and partner Takeda Pharmaceutical Co. Ltd. launched a formal dispute process seeking, among other changes, to shift more of the financial responsibility for the cost of a new CVOT to Orexigen.

The stock (NASDAQ:OREX) fell 91 cents, or 15.4 percent to close Wednesday at $5.02. It has dropped about 27 percent just this week.

When the knot of news is untangled, however, the story reads more as a public airing of dirty laundry among the parties involves and will likely have little impact on Contrave, a drug most analysts continue to view as a potential market leader in the obesity space. Piper Jaffray analyst Charles Duncan, in fact, wrote in a research note that "the impact of this news has unduly impacted shares," and said Orexigen remains one of his firm's top picks for 2015, "particularly for risk tolerant investors seeking longer-term growth."

That the Light Study is to be halted prematurely is hardly a surprise. At the time of Contrave's approval last year, for which the FDA reviewed interim analyses of the ongoing Light Study, executives of San Diego-based Orexigen indicated another separate CVOT study would likely be needed to meet postmarketing requirements, citing both problems with the design of the Light Study as well as the risk of disclosing data from the ongoing, blinded study. (See BioWorld Today, Sept. 12, 2014.)

"Even with confidential disclosure for regulatory submission, [the] FDA was concerned that that could eventually lead to broader public dissemination of the information," Orexigen CEO Michael Narachi explained to investors at the time of approval.

Nevertheless, Orexigen stunned the investment community – it also earned an unusual public wrist-slap from the FDA – when it disclosed in an 8-K filing in March the results from the 25 percent interim analysis from the Light Study, showing a statistically significant cardiovascular benefit for Contrave vs. placebo. Shares of Orexigen soared 30 percent on those early data, though analysts urged caution and an FDA official was quoted publicly calling those interim results "misleading" and "unreliable."

That disclosure was made as part of a patent filing update and occurred "without the authorization of the study's academic leadership," according to the Light Study's executive steering committee, led by investigators at the Cleveland Clinic.

Ironically, it was the steering committee that made public this week data obtained after 50 percent completion of the Light Study. With a total of 192 events, results demonstrated that 102 primary endpoints (cardiovascular death, stroke, myocardial infarction) occurred in the placebo group compared with 90 in the Contrave group (HR = 0.88, 95 percent CI 0.66 – 1.17), meaning data showed an absence of cardiovascular harm for patients in the study – the whole point of the CVOT in the first place – but did not confirm the statistical cardiovascular benefit seen at the 25 percent interim mark.

"The inconsistency of effects on cardiovascular outcomes between the first 25 percent and the second 25 percent of the Light Study clearly illustrates the risks inherent in pre-judgment of clinical trial results based upon an interim analysis and demonstrate why interim results should remain confidential during any ongoing trial," said the Cleveland Clinic's Steven Nissen, chair of the steering committee.

The tone of the Cleveland Clinic release was surprising to RBC Capital Markets analyst Simos Simeonidis. "It appears to be a case of an academic [committee?] wanting to make an example of a sponsor company that did not abide by their instructions regarding the design and conduct of a CVOT trial, in order to dissuade/intimidate others from doing the same," he wrote in a research note.

For its part, Orexigen acknowledged Wednesday there was "pressure" from the steering committee to release the data and said the company was unable to comment at this time. "We maintained we would not be in a position to release data without access to the full dataset, which we have not had and still do not have," the company said.

TROUBLE WITH ONGOING CVOTs

Interim analysis disclosure for ongoing CVOT studies is not a new debate. It's been a topic of discussion ever since the FDA issued its guidance in 2008 calling for the large and costly cardiovascular assessments for diabetes candidates – the Cleveland Clinic's Nissen, in fact, was a staunch proponent of CVOTs, having co-authored a meta-analysis on Avandia (rosglitazone, Glaxosmithkline plc). (See BioWorld Today, July 3, 2008, and Dec. 18, 2008.)

In 2012, obesity drugs were included. A two-day meeting of the Endocrinologic and Metabolic Drugs Advisory Committee meeting ended with a 17-6 vote in favor of requiring large CVOTs for all obesity drugs, regardless of cardiovascular risk or signal. (See BioWorld Today, April 2, 2012.)

In August 2014, the FDA held a public hearing specifically to discuss early CVOT data disclosure, with most presenters, Nissen among them, coming down against disclosing early results for fear they might not be confirmed over the long term.

It's not an issue that has come up often. Prior to Orexigen's application, the FDA has only reviewed a couple of regulatory submissions based on interim CVOT data. One was Takeda's DPP-4 inhibitor (alogliptin, which gained approval on interim data from the EXAMINE CVOT in January 2013 and later went on to complete the EXAMINE trial, with positive results, in September of that year. Johnson & Johnson's SGLT2 inhibitor Invokana (canaglifozin) was approved after an advisory committee discussed data from the ongoing CVOT study dubbed CANVAS, though J&J opted to start a second CVOT to address postmarketing requirements.

Unlike its competitors Arena Pharmaceuticals Inc. and Vivus Inc., both of which were required to conduct postmarketing CVOTs as part of the approval of their respective obesity drugs Belviq (lorcaserin) and Qsymia (phentermine/topiramate), Contrave was asked to conduct a pre-approval CVOT, according to a January 2011 complete response letter, a delay that meant it trailed competing products into the market by more than a year. (See BioWorld Today, Feb. 2, 2011.)

Despite that disadvantage, Contrave has fared better, with a much more impressive launch, reaching nearly 4,000 prescriptions in its fifth week, besting the 12-week prescription numbers for both Qsymia and Belviq, a fact attributed at least in part to Takeda's marketing muscle. (See BioWorld Insight, Feb. 2, 2015.)

For the first quarter, Takeda recorded Contrave U.S. net sales of $11.5 million, with Orexigen earing $2.3 million in royalties. According to Cortellis Competitive Intelligence, consensus forecasts see annual Contrave sales reaching $454 million in 2020.

DISPUTE RESOLUTION PROCESS AHEAD

Given the drug's potential, it's unlikely Osaka, Japan-based Takeda will back out of the agreement, noted RBC's Simeonidis. "At least according to [Orexigen] management, that is a fairly straightforward process, since Takeda can walk away from the agreement fairly easily if it wants to," he wrote, adding that Takeda might be using the dispute resolution pathway "as a way of getting Orexigen to pay more, for example, to pay for the entirety of the CVOT, instead of sharing its cost 50/50, as originally agreed to."

The new CVOT is estimated to cost about $210 million to $215 million.

Like the termination of the Light Study, Takeda's latest move also isn't unexpected. At the time of Contrave's approval, Orexigen reported a nonbinding term sheet following discussions for potentially renegotiating the collaboration. With Takeda claiming an undisclosed breach of contract, the firms will now enter a formal process – arbitration is a possibility – to resolve the differences, though both said the commercialization of Contrave shouldn't be affected.

JP Morgan analyst Jessica Fye wrote in a research note that a worst-case scenario could see Orexigen paying an additional $100 million in R&D costs over the course of the CVOT, which is expected to be completed in 2022. "We believe it is also possible that the agreement could remain unchanged, or that [Orexigen] might become responsible for some incremental spend but less than $100 million."

Under the deal, inked in 2010, Orexigen is responsible for the first $60 million in post-approval development costs, with Takeda paying $15 million per year from 2015 to 2017 in anniversary milestones. Once the $60 million is turned over, safety-study expenses are split 50/50, with life-cycle management trials split 75/25 between Takeda/Orexigen. (See BioWorld Today, Sept. 7, 2010.)

Orexigen ended the first quarter with $188.6 million in cash, equivalents and marketable securities.