Specialists Positive on Orexigen's (OREX) Contrave Interim Data; Leerink Partners Raises Price Target to $11

Leerink Partners maintained an Outperform rating on Orexigen Therapeutics (NASDAQ: OREX) and raised its price target to $11.00 (from $8.00). Yesterday shares of Orexigen surged after it reported Contrave LIGHT interim data as part of a patent approval. Analyst Paul Matteis noted positive specialist feedback and significantly improved opinions, as data showed Contrave does not lead to cardiac harm.

"Following positive MEDACorp KOL feedback coupled with our own assessment of the results of the LIGHT study 25% interim analysis, we are raising our Contrave revenue estimates and our PT to $11/share, from $8," said Matteis.

"While it's unclear whether or not the observed 41% reduction (0.59 hazard ratio [HR]) in Major Cardiovascular Adverse Events (MACE) will be sustained as the LIGHT trial data mature, KOLs note that their opinions of Contrave have improved significantly now that it appears almost certain the drug does not do any cardiac harm. Our updated model, reflecting our analysis and this feedback, assumes a slightly steeper US launch, greater peak sales, and provides OREX more credit for Contrave's potential in ROW markets," continued the analyst.

Matteis added, "We believe that many potential prescribers (especially PCPs) have approached new obesity medications with caution, highly aware that multiple drugs have been pulled from the market once an unexpected CV risk signal was discovered. Specialists with whom we spoke were very surprised by the interim findings and believe the new CV data increase the proportion of their pts who are Contrave candidates."

For an analyst ratings summary and ratings history on Orexigen Therapeutics click here. For more ratings news on Orexigen Therapeutics click here.

Shares of Orexigen Therapeutics closed at $7.64 yesterday.

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