A black-box warning, confusion about postmarketing requirements and the third-to-market status of Orexigen Therapeutics Inc.'s obesity therapy Contrave (naltrexone and bupropion) extended-release tablets may have been responsible for weakening of the stock, but the company and partner Takeda Pharmaceuticals U.S.A. sounded upbeat during a morning conference call with investors.

"Most of what's in the label was expected and predicted many years ago," said CEO Michael Narachi. Contrave won FDA clearance yesterday as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index of 30 kg/m2 or greater (obese), or 27 kg/m2 or greater (overweight) in the presence of at least one weight-related comorbid condition.

Takeda brings heavyweight marketing to the obesity picture, with about 900 sales reps in the U.S., who call regularly on doctors to sell the type 2 diabetes drugs Actos (alogliptin with pioglitazone) and Nesina (alogliptin). Reps likely will be providing drug samples – Contrave is not a scheduled drug, unlike Belviq and Qsymia – and setting up patient assistance programs. Better coverage by insurance companies since the approval of the competitors likely will benefit Contrave, too. The price likely will be about the same as Belviq and Qsymia, analysts guessed.

"We see not being scheduled as a big point of differentiation, as you can tell by the type of launch we've orchestrated with Takeda," said Mark Booth, chief commercial officer, noting that primary-care doctors will be the main targets of Takeda's salesforce. "Primary care physicians love samples," Booth said. "I'm not going to get into specifics, but we see it as a big advantage."

Money's ahead for Orexigen. Under the terms of the deal with Takeda, the U.S. arm of Osaka, Japan-based Takeda Pharmaceutical Co. Ltd., Orexigen gets $100 million in milestone payments from approval to first commercial sale ($30 million with approval and $70 million when drug is delivered). The firm also retains co-promotion rights, but is still evaluating this option, and must give six months' notice to exercise it. (See BioWorld Today, Sept. 7, 2010.)

But the firm will be paying out, too. 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.

For the most part, Contrave's label resembles those of competitors Belviq (lorcaserin, Arena Pharmaceuticals Inc./Eisai Inc.) and Qsymia (phentermine/topiramate, Vivus Inc.), which reached the market two years ahead of Contrave – a worrisome factor but possibly offset by the big guns held by Takeda.

There's a black-box warning about suicidality because of Contrave's bupropion element, which should have been expected and "the risk is well vetted within the depression-treating community which overlaps with obesity," said analyst Charles Duncan with PiperJaffray, adding in a research report that the "risk compares favorably to that for other currently marketed obesity drugs."

Preston Klassen, Orexigen's head of global development, noted that bupropion as a generic antidepressant has done well, and is used by about 7 million Americans. Booth said that "in all the market research we've done, the comfort level that physicians have with bupropion is a plus" for Contrave.

The PDUFA date for the decision was yesterday. Deerfield, Ill.-based Takeda and Orexigen, of La Jolla, Calif., disclosed the go-ahead after the market closed Wednesday.

With regard to postmarketing tests, the FDA requires Orexigen to run a cardiovascular-outcomes (CVOT) study along with trials in pediatric patients, animal toxicity, cardiac conduction, hepatic/renal impairment and drug-drug interactions.

J.P. Morgan analyst Cory Kasimov speculated that Orexigen's stock dip had to do with investor uncertainty about the CVOT stipulations as well as the disappointing launches of the earlier two obesity therapies. "Nevertheless, we expect the focus to shift to the launch uptake and how much of a difference the marketing muscle of Takeda can make in the obesity market," he wrote in a research report, and pointed out that the sampling capability with Contrave will add oomph.

The much-delayed Contrave met its most recent hitch in June, when the FDA said it needed more time to decide on CVOT experiments, based on data that Orexigen has ongoing, called LIGHT, in 8,900 patients. (See BioWorld Today, June 12, 2014.)

Orexigen will proceed with the LIGHT study, and slated another interim analysis early next year. The trial is expected to cost $50 million through 2018 if it finishes.

A new CVOT is in the works as well, with a protocol expected next April. Orexigen will shell out $150 million to $200 million for the new experiment, which is about the same price tag as for LIGHT.

"The overall life-cycle plan is in process," CEO Narachi said. "You can imagine that we've figuring out how to put the pieces together to maximize the value of the total program," and how Contrave will fit with Takeda's diabetes drugs. "These discussions are not only ongoing with Takeda but also with potential rest-of-world partners," he said.

Orexigen's stock (NASDAQ:OREX) closed Thursday at $5.28, down 62 cents, or 10.5 percent.