Orexigen Therapeutics, Inc. Gives the Skinny on Its Drug Launch

By Markets Fool.com

The launch of Orexigen Therapeutics' obesity drug Contrave was nothing to get too excited about. In the fourth quarter, which included 10 weeks of the launch, net sales of the drug were just $6.5 million, which resulted in $1.3 million in royalties from its partner,Takeda Pharmaceuticals.

Continue Reading Below

But it's nothing to be depressed about, either. As Vivus'sQsymia and Arena Pharmaceuticals'and Eisai's Belviq have shown us, the obesity market is hard to crack. And the launch of Contrave is going substantially better than either of the aforementioned two, which isn't all that surprising given Takeda's larger sales force entering a market that's already been primed by Vivus and Eisai.

November

December

January

Prescriptions

10,935

25,027

31,765

Month-Over-Month Growth

N/A

129%

27%

Source: IMS Health data presented by Orexigen.

For the first two weeks of February, the company has seen 9% to 10% week-over-week growth. If that continues, prescriptions in February would be around 38,600, about 22% higher than January. Extrapolate out 20% month-over-month growth, and you can get to some decent numbers in the $100 million net sales per quarter range by the beginning of next year.

Those potential sales figures assume Takeda and Orexigen are going to make the same amount off each prescription, which is a little hard to predict at this point. In the fourth quarter, the gross-to-net adjustment was 48% because of a pharmacy discount card that allows patients who don't have insurance that covers Contrave to pay just $70 per month for first two months, and $60 per month thereafter. Patients who are covered under insurance pay $55 per month for the first two months and $45 per month thereafter, which could also result in a gross-to-net discount, albeit less than for the patients who aren't covered by insurance.

Continue Reading Below

As more patients become covered, the gross-to-net discount should decrease, but it's hard to know how fast that'll occur, and how much of a discount Takeda will give insurers and pharmacy benefit managers. Management said to expect gross-to-net discounts between 35% and 50% during the launch, which is a pretty wide range.

In addition to the large sales force and primed pump, the efficacy and safety profile for Contrave compared to Qsymia and Belviq has also helped Takeda have an easier time launching the drug. Contrave is the only one of the three that has data from a cardiovascular outcomes trial, although the data is a little weak since the interim results from the ongoing trial only set a threshold to exclude a cardiovascular risk for Contrave; the results didn't actually say Contrave was creating a cardiovascular benefit.

The next interim look at the data is upcoming. If Contrave is creating a clear benefit, the data monitoring committee, which is set to meet soon, could end the trial early. It's only halfway through the trial now, so it's a long shot to expect a stoppage due to positive safety, but weirder things have happened in the biotech sector. The trial could also be stopped by the committee for poor safety, so a decision to continue the trial shouldn't be seen as negative.

The article Orexigen Therapeutics, Inc. Gives the Skinny on Its Drug Launch originally appeared on Fool.com.

Brian Orellicould lighten up on his use of puns in headlines. He and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.