Orexigen Therapeutics (OREX) got an unexpected surprise on Wednesday when the FDA extended its review of the New Drug Application for NB32, the company’s investigational drug being evaluated for weight loss, by three months. The company was largely expected to receive an approval this week. FDA says that they need more time to finalize post-marketing obligations related to the ongoing cardiovascular outcomes trial, the LIGHT Study. Recall that an interim analysis of the LIGHT study late last year ruled out a doubling of cardiovascular risk for patients on NB32, vs those on placebo. The stock sold off 15%.
In a conference call on Wednesday morning, Orexigen confirmed that the company will NOT attempt to have interim results from the LIGHT study included in the NB32 (Contrave) label, once approved. That would have been the single saving grace to the delay.
Orexigen gets very interesting in the third quarter with a new PDUFA date set for September 11. Additionally, it’s in the same timeframe that European regulators are will decide on NB32’s approval in the 2nd largest pharmaceutical market globally.
Thankfully, PropThink readers knew to sell the stock when it touched $7.00 in Tuesday’s trading session, the day before the delay. For those that followed our mid-May trade recommendation, that’s 30% profit in less than 30-days.
Don’t forget! You can still RSVP for next week’s investor meetup.
Conatus Pharmaceuticals (CNAT) left many traders scratching their head this week. On Wednesday, the stock ripped higher by 50% on nearly 18x average volume. That with no news from the company and no major events upcoming. What happened? A small float – shares available for investors to buy and sell on the open market – and a meaningful short interest combined to produce a serious supply/demand imbalance
PropThink recommended CNAT to our Premium readers on Wednesday morning before the open – you can read ‘Intercept Isn’t the Only Way to Play Rare Liver Diseases’ – based purely on the fundamentals: a quality cash position, an attractive pharmaceutical asset in emricasan, and what we considered a low valuation. That was enough to get the stock moving, and readers who took advantage of the alert saw their position climb more than 50% far more rapidly than anyone anticipated. Investors not already involved should keep Conatus on the radar.
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And, a happy Father’s Day to the ‘pop’s’, ‘dad’s’, and ‘pa’s’ out there. Have a great soccer-filled weekend!
