Leerink Swann Says Orexigen (OREX) is Still the Best Play After Obesity Drug CV Study Briefing Documents, Boosts Target (VVUS)
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Price: $0.22 --0%
Rating Summary:
3 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 17
Rating Summary:
3 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 17
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Leerink Swann issued some commentary on Orexigen Therapeutics (NASDAQ: OREX) and other obesity drugs following briefing documents for the 2-day obesity drug CV study requirement panel (Mar 28, 29). The firm reiterated and Outperform rating and raised their valuation target from $5 to $7.
Based on the draft questions, the Qnexa February 22 panel; and the SPA OREX has for a Contrave outcomes study, the firm believes there is an approx. 60% chance that VIVUS' (Nasdaq: VVUS) Qnexa will need to run a 2-stage pre-post/approval CV study, 30% chance for post-approval and 10% chance for pre-approval.
The firm notes investors already expect Orexigen will run the 2-stage study and Contrave reaches the market in 2015. They continue to see Orexigen as the obesity investment with the best risk-reward profile. Also, based on recent checks with MEDACorp primary care specialists they are raising their outer year Contrave revenue estimates and thus the price target from $5 to $7.
The best case for Orexigen is if the FDA decides drugs with theoretic CV risk can run post-approval studies, OREX may be able to refile in 2012 and gain approval for Contrave around year-end. Alternatively, if the FDA decides Qnexa needs a pre-approval study while Contrave's SPA allows a 2-stage program, Contrave can beat Qnexa to market. They sees a 20% chance of this and $10+ OREX valuation.
The base case for Orexigen assumes Qnexa will have to run a two-stage CV outcomes study, meaning both will reach the market around 2014, consistent with our model. They see a 60% chance for this.
The worst case for Orexigen is the FDA could draw a line in the sand, believe that Qnexa does not have a theoretic CV risk and approve it in 2012, while Contrave waits for 2014.
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 $4.89 yesterday.
Based on the draft questions, the Qnexa February 22 panel; and the SPA OREX has for a Contrave outcomes study, the firm believes there is an approx. 60% chance that VIVUS' (Nasdaq: VVUS) Qnexa will need to run a 2-stage pre-post/approval CV study, 30% chance for post-approval and 10% chance for pre-approval.
The firm notes investors already expect Orexigen will run the 2-stage study and Contrave reaches the market in 2015. They continue to see Orexigen as the obesity investment with the best risk-reward profile. Also, based on recent checks with MEDACorp primary care specialists they are raising their outer year Contrave revenue estimates and thus the price target from $5 to $7.
The best case for Orexigen is if the FDA decides drugs with theoretic CV risk can run post-approval studies, OREX may be able to refile in 2012 and gain approval for Contrave around year-end. Alternatively, if the FDA decides Qnexa needs a pre-approval study while Contrave's SPA allows a 2-stage program, Contrave can beat Qnexa to market. They sees a 20% chance of this and $10+ OREX valuation.
The base case for Orexigen assumes Qnexa will have to run a two-stage CV outcomes study, meaning both will reach the market around 2014, consistent with our model. They see a 60% chance for this.
The worst case for Orexigen is the FDA could draw a line in the sand, believe that Qnexa does not have a theoretic CV risk and approve it in 2012, while Contrave waits for 2014.
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 $4.89 yesterday.
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