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INITIATING COVERAGE
Biotechnology October 3, 2013
Simos Simeonidis, Ph.D. simos.simeonidis@cowen.com 646.562.1386 Yatin Suneja yatin.suneja@cowen.com 646.562.1388 Raymond Chang, M.D. raymond.chang@cowen.com 646.562.1337 Recommendation
Rating: Price Target (in $): Expected Return: Dividend: Enterprise Value (MM): Market Perform $4.50 (10.0)% NA $994.0 2013E $(0.09)A $0.18A $(0.13) $(0.13) $(0.16) 2014E $(0.08) $(0.08) $(0.08) $(0.04) $(0.28)
Fundamentals
Revenue (MM) ('12A) Revenue (MM) ('13E) Revenue (MM) ('14E) 27.6 81.1 37.5
BELVIQ/Phen combo may be the future for Arena, but if it is, that will likely not be for a number of years.
Arena and Eisai recently announced plans to test the BELVIQ-plus-phentermine combination. We believe this combination has the potential for significant weight loss, similar to that of FenPhen, its predecessor, and theoretically without the disastrous side effects, given lorcaserin's selectivity for the serotonin 2C (vs. the 2B) receptor. However, 1) it could be a number of years until "Bel-Phen" gets to market & 2) the regulatory path, including CVOT requirements, is unclear. Despite that, 3) we have assumed that "Bel-Phen" is approved, have included it in our revenue estimates, and had it account for a significant portion of NPV in ARNA.
Close to 52-week low, ARNA still trades on par or at premium to obesity peers.
ARNA shares, close to a 52-week low, still trade at EV ~$1B, either on par or even at a premium to obesity peers VVUS ($10.19, Outperform) ($1B), OREX ($6.06 Outperform) ($750M). Our sum-of-the-parts NPV analysis points to a fair value of $4.59/share. Therefore, and despite recent decline in ARNA shares, we consider ARNA fairly valued and as even having some potential room for further downside. Please see addendum of this report for important disclosures. MEMBER: FINRA/SIPC www.cowen.com
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Company Description
Arenas lead product, BELVIQ (lorcaserin), a selective serotonin (5-HT) 2C receptor agonist, was approved by the FDA for the treatment of obesity (chronic weight management) in June 2012 and was launched in the U.S. in June 2013. BELVIQ has demonstrated modest weight loss with a relatively benign safety profile in three Phase III trials. BELVIQ has been classified by the U.S. Drug Enforcement Administration (DEA) as a Schedule IV drug. Arena has partnered BELVIQ with Eisai in North and South America. Under this agreement, Arena sells BELVIQ to Eisai at transfer prices (i.e. royalty rates) ranging from 31.5%-36.5% of Eisais annual net sales in the U.S. Additionally, Arena is entitled to receive up to $1.2B in milestones and purchase price adjustments (i.e. sales milestones) from Eisai. Through its G-proteincoupled receptor (GPCR)-focused drug discovery platform, Arena has internally developed early stage pipeline candidates, which include: 1) temanogrel, an inverse agonist of the serotonin 2A receptor, which has completed two Phase I trials and is being developed in partnership with South Korean biopharma Ildong for treatment of thrombotic diseases; 2) APD811, an orally available agonist of the prostacyclin (IP) receptor for the treatment of pulmonary arterial hypertension (PAH), which has recently completed Phase I testing in healthy volunteers, and will be evaluated in a Phase II trial in 1Q14; 3) APD334, an S1P1 receptor agonist, which is being developed as a potential treatment for autoimmune diseases, including multiple sclerosis and rheumatoid arthritis, and recently completed Phase I dosing in healthy volunteers; and 4) APD371, a CB2 receptor agonist, currently in preclinical development as a potential treatment for pain. Arena was founded in 1997, is based in San Diego, CA, and currently has approximately 290 employees. Arena: R&D Pipeline
Candidate name BELVIQ BELVIQ + Phentermine Temanogrel APD811 APD334 APD371 Total Drugs in Development San Diego, CA Source: Cowen and Company Indication Obesity Obesity Thrombotic disease Pulmonary arterial hypertension (PAH) Autoimmune diseases Pain P-C I 0 1 II III FILING MKT Comments Launched in the US on June 7, 2013 by Eisai Eisai to initiate a 12-week pilot study YE13/1Q14 Partnered with Ildong Phase II in PAH to be initiated 1Q14 Completed dosing in a Phase I trial in healthy subjects
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Investment Thesis
We are initiating coverage of Arena Pharmaceuticals (ARNA) with a Market Perform rating and a 12-month price target of $4.50/share. Our thesis on ARNA is that the companys lead asset, BELVIQ (lorcaserin), a novel, twice-a-day agent approved in the U.S. for the treatment of obesity (chronic weight management), which was launched in the U.S. market in June 2013, will have a very difficult time garnering significant market share, mainly due to its modest efficacy. In addition, the compounds safety is not without its issues, since in addition to the carcinogenicity and valvulopathy signals that emerged in its preclinical studies, the BELVIQ label includes warnings about serotonin syndrome (a potentially significant issue, since many overweight and obese patients present with depression and take SSRIs) and valvular heart disease (with the Fen-Phen history still very fresh in physicians minds). Our view of BELVIQs overall clinical profile is based on A) our own analysis of the BELVIQ clinical dataset, in conjunction with the datasets from the Qsymia and Contrave clinical trials, and B) a 100-physician survey that we conducted in order to gain an understanding of prescribers views of these new anti-obesity agents, which we have included at the end of our initiation. Qsymia could make things very difficult for BELVIQ in the next 12 months Our detailed analysis of the clinical datasets for the three obesity compounds, which is included in the back of our report, leads us to believe that Qsymia will end up being the leader in the market, given its strong weight loss efficacy, which comes with once-a-day convenience. Furthermore, and despite the fact that Vivus recently ousted management team and board have faced significant difficulties in the Qsymia launch thus far, most of which have been self-inflicted by, for example, not partnering the drug, as Arena management did appropriately, in our view, we expect that the recent changes at Vivus may serve to relieve some of these issues, for example, if the new team manages to secure a commercial partner for Qsymia. Were such a partnership to materialize, especially one in which Qsymia would be partnered with a big pharma or specialty pharma company with considerable experience in marketing primary care products in the metabolic space, and one in which a substantial level of commercial resources would be committed, this could pose an even more daunting commercial threat to BELVIQ, which until recently was facing a theoretically much easier opponent: Qsymia was approved with a fairly ominous REMS program, was only available via mail-order, and was (still is) being detailed by a 180-person salesforce. Right now, the REMS has been modified, and the drug is available in retail pharmacies; again, should the new regime at Vivus manage to convert its formidable Rolodex into a strong partnership, BELVIQ, with its modest-to-underwhelming weight loss, and the shadows (justified or not) of carcinogenicity and valvulopathy association in some physicians minds (again, fair or unfair), could be in very serious commercial trouble. and after that, things could get even tougher, should Contrave make it to the market. We expect the Qsymia-BELVIQ duopoly to become a three-way fight approximately 12 months from now, with the U.S. approval of Contrave. Orexigens Contrave is a combination of bupropion, an antidepressant with which U.S. PCPs are very familiar and very comfortable prescribing (26M scripts annually), and naltrexone, an agent that is approved for the treatment
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of addiction and the main function of which is to reduce cravings. This combination product is currently being tested in the LIGHT cardiovascular outcomes trial (CVOT). Interim data from this trial are expected by early December 2013, and if positive, Orexigen is expecting to resubmit the Contrave NDA by YE13; this drug could thus be on the market in 2H14. We view Contrave as a formidable commercial opponent for both BELVIQ and Qsymia in the obesity/weight loss space, and as one that could quickly garner significant market share and pose a formidable competitive threat to both Qsymia and BELVIQ for the following reasons: 1) We view Contraves mechanism of action, given the combination of the two components that are present in Contrave, as uniquely positioned to be very effective in the treatment of obesity, since A) depression is a comorbidity in a large proportion of the obese population (25-35%, according to a number of sources) and B) helping to deal with cravings and binge-eating are viewed as especially helpful by the obesity experts with whom we have consulted, 2) Contrave would be the only anti-obesity agent on the U.S. market that would have been tested in and received the FDAs OK to get to the market following (interim) data from a CVOT study, 3) Contrave has a North American (plus Mexico) partnership with Takeda, which is a company with a significant diabetes presence in the U.S., given the Actos/alogliptin franchise, and appears to have committed substantial commercial resources behind this product in terms of a primary care salesforce first position calling effort, 4) Contrave would be the only one of the three anti-obesity agents that could be sampled, since both Qsymia and BELVIQ are DEA-scheduled drugs. We dont see the upside in ARNA shareseven though we have included BELVIQ/Phentermine, E.U. BELVIQ revenues, and $1.2B in WW sales. Our Market Perform rating on ARNA is based on our sum-of-the-parts NPV analysis, which includes revenues from sales of both BELVIQ and the BELVIQ/Phentermine combination product in the U.S., and from BELVIQs E.U. sales, where we have assumed Arena will be able to secure a partnership with similar terms as in North America and other territories. We have modeled total peak U.S. sales of BELVIQ and its combination product with Phentermine of $915M in 2029. We have also modeled peak E.U. BELVIQ sales of $246M in 2026, and total WW sales of $1.2B in 2026. In addition, we have assumed revenues from sales of BELVIQ and the BELVIQ/Phentermine combination product in the other two territories for which Arena has secured partnerships, namely South Korea and Taiwan. While one could certainly make the argument that our revenue projections may have left room for upside in BELVIQ sales, especially when compared to our projections for Qsymia and Contrave, both of which we consider more efficacious products and thus more commercially robust for a therapeutic area in which efficacy, in addition to safety, is of paramount importance, it is also important to acknowledge that in our modeling assumption, we have included projections for BELVIQ/Phentermine, a potential product for which we dont know if
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and when it will get to the market, and, if and when it does, how it will do commercially, given its inevitable association (fair or unfair, and thats definitely one argument its competitor s will attempt to make) in physicians minds with Fen-Phen. In addition, we have also included in our NPV calculations revenues from E.U. sales of BELVIQ, while again, we dont know if and when BELVIQ will get to the E.U. market. Based on all these modeling assumptions, we have arrived at our 12-month price target of $4.50/share and our Market Perform rating on ARNA.
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Arena Partnered With Eisai to Market BELVIQ in North & South America
On July 1, 2010, two months before the first FDA AdCom in September 2010, which voted 9-5 against BELVIQs approval, Arena and Eisai announced a partnership agreement to market BELVIQ in the U.S. The agreement was amended on May 10, 2012, the day of the second FDA AdCom, which voted 18-4 to recommend BELVIQs approval, to include most of North and South America, including Canada, Mexico, and Brazil. Under the agreement, Arena received $50M as an upfront payment, $5M for the amendment, a $20M milestone payment for inclusion in the BELVIQ label of data from the Phase III BLOOM-DM trial in T2D patients, a $65M milestone upon DEA scheduling and launch, and a $1M milestone for regulatory submissions in Mexico and Canada, for a total of $141M in milestone payments to date. Under the terms of the agreement, Arena manufactures BELVIQ at its facility in Switzerland and sells finished product to Eisai. The transfer price (NOTE: this is the term used in the agreement and one that Arena management has been using in its communications with investors, and we believe it is equivalent to what most companies and investors commonly refer as royalty rate) starts at 31.5% of Eisais annual net product sales and will increase on a tiered basis, reaching a maximum rate of 36.5% on the portion of annual net product sales exceeding $750M. Under the agreement, Arena is also entitled to receive up to $53.5M for regulatory filings and approvals. In total, Arena is eligible to receive up to $1.19B in one-time purchase price adjustments (NOTE: again, this is the term used in the agreement and one that Arena management has been using in its communications with investors, and we believe it is equivalent to what most companies and investors commonly refer as sales milestones). These one-time purchase price adjustments would be paid in seven payments, and begin to be triggered at annual net BELVIQ sales of $250M. The caveat here is that, in order for Arena to receive all the milestones for which it is eligible, BELVIQ must achieve annual sales of $2.5B in all the territories covered by the agreement.
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$185M in one-time purchase price adjustments for annual net sales in ex-US territories Total potential purchase price adjustment payments Patent life Post-marketing costs up to $1.2B (would have to achieve at least $2.5B in annual sales in all the territorries covered by the agreement) US patents expire mid-2023; (Arena has guided it believes it can receive up to an additional three years of patent extension under Hatch-Waxman, extending US patents until mid2026) Eisai will pay for 90% of CVOT expenses and Arena will pay 10%; Arena is responsible for 50% of certain pediatric development costs
Company disclosure Total Eisai Annual Adjustment Payments to Arena in Net Sales Addition to Transfer Price $250M $X $X $X $X $X $2.5B
Source: Cowen and Company, SEC filings
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portion of annual net sales exceeding $15M. In its 2Q13 earnings call, Arena announced that Ildong would file for regulatory approval in South Korea around YE13.
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Valuation
To value ARNA shares, we use a sum-of-the-parts methodology, and estimate the probabilityadjusted NPV of: 1) the BELVIQ royalty stream, 2) the four pipeline compounds, and 3) the companys current net cash position.
ii) E.U. collaboration: We have assumed that Arena will enter into a collaboration agreement with a pharmaceutical company for E.U. rights to BELVIQ. We have also assumed that Arena will be able to secure similar economics for E.U. rights as for North/South American rights with Eisai. We have assumed that Arena will receive an upfront payment of $100M in 2015 and $50M in 2016 for commercial launch milestones. Arena will also receive $50M as a first commercial milestone in 2018, $50M as a second commercial milestone in 2020, $50M as a third commercial milestone in 2022, and a final commercial milestone of $75M in 2024. Arena will sell finished product to its E.U. partner at a purchase price of 36% of annual net product sales. iii) Ildong collaboration: In exchange for South Korean rights to BELVIQ, Arena received $5M as an upfront payment and is entitled to receive $3M on approval. Arena will sell finished product to Eisai at a purchase price that will start at 35% of Ildongs annual net product sales
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and will increase on a tiered basis up to 45% of the portion of annual net sales exceeding $15M. The table below lists the selling price assumptions which we have used in our model for South Korean sales. Cowen Revenue Model: Ildong Selling Price Assumptions
T ie rs 1 2 3 <$5M : 35% $5-$15M : 40% >$15M : 45%
iv) CY Biotech collaboration: In exchange for Taiwanese rights to BELVIQ, Arena received $2M as an upfront payment and is eligible for a milestone payment upon approval of an additional BELVIQ indication in Taiwan. Similar to the agreement between Arena and Eisai/Ildong, Arena will sell finished product to CYB. The purchase price will be 45% of CYBs annual net product sales, and Arena is eligible for purchase price adjustment payments (which we understand to be equivalent to sales-based milestone payments) based on annual net sales by CYB. Patent life assumptions: BELVIQ is covered by issued U.S. and E.U. patents that expire in mid-2023. Arena has already filed for extension under Hatch-Waxman. In our NPV calculations, we have assumed that Arena will receive a 3-year patent extension under HatchWaxman, resulting in U.S. patent expiry in mid-2026. Further, we have assumed that the BELVIQ/Phentermine combination will be introduced to the U.S. in 2018, which will extend the patent life beyond 2026, because of the longer patent life of BELVIQ/Phentermine. In the E.U., BELVIQ will be eligible to receive 10-year exclusivity, which will end in mid-2026, assuming a 2016 launch. U.S./E.U./South Korea/Taiwan BELVIQ sales: We have modeled that BELVIQ could reach peak sales of $915M, $246M, $50M, and $24M in the U.S., E.U., South Korea, and Taiwan, respectively, for total peak sales of $1.2B in 2026. Discount Rate and Probability of Success (POS): In calculating the net present value of BELVIQs free cash flows, we use a 10% discount rate. We have also probability -adjusted the E.U., South Korean (SK), and Taiwan royalties to Arena by assigning a 50%, 80%, and 80% probability of success (POS) that the compound is approved and reaches the market in the E.U., South Korea, and Taiwan, respectively. Using these assumptions, as shown in the table below, we arrive at a probability-adjusted NPV for BELVIQ of $3.62/share.
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2013E
18 6 6 2 33 17 65 18
0%
2014E
54 17 17 5 35 20 10 (33)
0%
2015E
88 28 28 5 36 20 10 (23)
0%
2016E
122 39 39 7 36 20 10 (15)
0%
2017E
158 50 50 10 37 20 0 (17)
0%
2018E
290 92 92 14 38 20 55 71
5%
2019E
372 120 120 19 19 0 0 76
8%
2020E
462 151 151 23 20 0 55 139
15%
2021E
634 209 209 32 20 0 0 134
15%
2022E
806 269 269 40 21 0 100 247
20%
2023E
753 250 250 38 21 0 0 153
20%
2024E
797 266 266 40 21 0 0 153
25%
2025E
844 283 283 42 22 0 0 164
25%
2026E
894 301 301 45 22 0 150 288
25%
2027E
901 303 303 45 23 0 0 177
25%
2028E
907 305 305 45 23 0 0 178
25%
2029E
915 308 308 46 24 0 0 179
25%
18
(33)
-286%
(23)
-29%
(15)
-35%
(17)
10%
71
-525%
76
6%
139
83%
134
-3%
247
84%
153
-38%
153
0%
164
7%
288
75%
177
-39%
178
1%
179
1%
0.24 0.98
1.24 0.89
2.24 0.81
3.24 0.73
4.24 0.67
5.24 0.61
6.24 0.55
7.24 0.50
8.24 0.46
9.24 0.41
10.24 0.38
11.24 0.34
12.24 0.31
13.24 0.28
14.24 0.26
15.24 0.23
16.24 0.21
$17
($29)
($19)
($11)
($11)
$43
$42
$69
$61
$102
$58
$53
$51
$81
$45
$42
$38
Discount Rate Perpetual Growth Rate Final year FCF Terminal Value
Discount Factor
Present Value of Terminal Value Present Value of Cash Flows Present Value of Total Cash Flows Fully Diluted Shares Outstanding Present Value of Cash Flows Per Share Probability of success BELVIQ NPV
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2013E
-
2014E
0
2015E
0 100 100
0%
2016E
16 6 6 1 50 55
0%
2017E
35 13 13 2 0 10
0%
2018E
55 20 20 3 50 64
5%
2019E
78 28 28 4 0 22
8%
2020E
101 36 36 5 50 69
15%
2021E
128 46 46 6 0 34
15%
2022E
157 56 56 8 50 79
20%
2023E
176 63 63 9 0 44
20%
2024E
198 71 71 10 75 102
25%
2025E
221 79 79 11 0 51
25%
2026E
246 88 88 12 0 57
25%
2027E
25 9 9 1 0 6
25%
2028E
12 4 4 1 0 3
25%
2029E
12 4 4 1 0 3
25%
0%
0%
100
55
-45%
10
-81%
64
509%
22
-65%
69
211%
34
-51%
79
134%
44
-45%
102
134%
51
-50%
57
11%
6
-90%
3
-50%
3
0%
0.24 0.98
1.24 0.89
2.24 0.81
3.24 0.73
4.24 0.67
5.24 0.61
6.24 0.55
7.24 0.50
8.24 0.46
9.24 0.41
10.24 0.38
11.24 0.34
12.24 0.31
13.24 0.28
14.24 0.26
15.24 0.23
16.24 0.21
$0
$0
$81
$40
$7
$39
$12
$35
$15
$33
$16
$35
$16
$16
$1
$1
$1
Discount Rate Perpetual Growth Rate Final year FCF Terminal Value
Discount Factor
Present Value of Terminal Value Present Value of Cash Flows Present Value of Total Cash Flows Fully Diluted Shares Outstanding Present Value of Cash Flows Per Share Probability of success BELVIQ NPV - EU
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2013E
-
2014E
-
2015E
2.1 1.0 3.1 0.7 0.5 1 0 3 4
0%
2016E
4.6 2.2 6.7 1.6 1.0 3 0 0 2
0%
2017E
6.6 3.2 9.8 2.4 1.4 4 1 0 3
0%
2018E
8.8 4.2 13.1 3.3 1.9 5 1 0 4
5%
2019E
19.9 9.6 29.5 8.0 4.3 12 1 0 10
8%
2020E
24.5 11.7 36.2 10.0 5.3 15 2 0 11
15%
2021E
33.1 15.9 49.0 13.9 7.2 21 2 0 16
15%
2022E
34.8 16.7 51.5 14.7 7.5 22 3 0 16
20%
2023E
40.7 19.6 60.3 17.3 8.8 26 3 0 18
20%
2024E
42.8 20.6 63.4 18.3 9.3 28 3 0 18
25%
2025E
45.0 21.7 66.8 19.3 9.8 29 3 0 19
25%
2026E
47.4 22.9 70.3 20.3 10.3 31 4 0 20
25%
2027E
49.9 24.1 73.9 21.4 10.8 32 4 0 21
25%
2028E
50.0 24.1 74.1 21.5 10.9 32 4 0 21
25%
2029E
50.1 24.2 74.3 21.5 10.9 32 4 0 22
25%
2
-46%
3
48%
4
34%
10
130%
11
15%
16
38%
16
-1%
18
18%
18
-1%
19
5%
20
5%
21
5%
21
0%
22
0%
0.24 0.98
1.24 0.89
2.24 0.81
3.24 0.73
4.24 0.67
5.24 0.61
6.24 0.55
7.24 0.50
8.24 0.46
9.24 0.41
10.24 0.38
11.24 0.34
12.24 0.31
13.24 0.28
14.24 0.26
15.24 0.23
16.24 0.21
$0
$0
$3
$2
$2
$3
$5
$6
$7
$7
$7
$6
$6
$6
$6
$5
$5
Discount Rate Perpetual Growth Rate Final year FCF Terminal Value
Discount Factor
Present Value of Terminal Value Present Value of Cash Flows Present Value of Total Cash Flows Fully Diluted Shares Outstanding Present Value of Cash Flows Per Share Probability of success BELVIQ NPV
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BELVIQ NPV - US BELVIQ NPV - EU BELVIQ NPV - SK/Taiwan Pipeline Cash Sum-of-the-parts value for ARNA
Source: Cowen and Company
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BELVIQ + BELVIQ/Phentermine sales in women between 18 and 64 years of age could be ~$290M in 2018, and that at 2.04%, 0.72%, 2.36%, and 2.36% penetrations in the U.S., E.U., South Korea, and Taiwan, respectively, BELVIQ could reach peak WW sales of $971M in 2026. BELVIQ + BELVIQ/Phentermine revenue model ($MM) - US
BELVIQ+BELVIQ/Phentermine Revenue Model (US)
US population
Population growth
2012E 318,769,185
0.88%
2013E 321,574,353
0.88%
2014E 324,404,208
0.88%
2015E 327,258,965
0.88%
2016E 330,138,844
0.88%
2017E 333,044,066
0.88%
2018E 335,974,853
0.88%
2019E 338,931,432
0.88%
2020E 341,914,029
0.88%
2021E 344,922,872
0.88%
2022E 347,958,193
0.88%
2023E 351,020,225
0.88%
2024E 354,109,203
0.88%
2025E 357,225,364
0.88%
2026E 360,368,948
0.88%
2027E 363,540,194
0.88%
2028E 366,739,348
0.88%
2029E 369,966,654
0.88%
155,453,282 98,739,136
63.5% 35.5%
156,821,271 99,608,040
63.5% 35.5%
158,201,298 100,484,591
63.5% 35.5%
159,593,469 101,368,855
63.5% 35.5%
160,997,892 102,260,901
63.5% 35.5%
162,414,673 103,160,797
63.5% 35.5%
163,843,923 104,068,612
63.5% 35.5%
165,285,749 104,984,416
63.5% 35.5%
166,740,264 105,908,279
63.5% 35.5%
168,207,578 106,840,272
63.5% 35.5%
169,687,805 107,780,466
63.5% 35.5%
171,181,057 108,728,934
63.5% 35.5%
172,687,451 109,685,749
63.5% 35.5%
174,207,100 110,650,984
63.5% 35.5%
175,740,123 111,624,712
63.5% 35.5%
177,286,636 112,607,010
63.5% 35.5%
178,846,758 113,597,951
63.5% 35.5%
180,420,610 114,597,613
63.5% 35.5%
35,052,393
35,360,854
0.025%
35,672,030
0.05%
35,985,944
0.07%
36,302,620
0.09%
36,622,083
0.11%
36,944,357
0.04%
37,269,468
0.03%
37,597,439
0.02%
37,928,297
0.02%
38,262,066
0.02%
38,598,772
0.02%
38,938,441
0.02%
39,281,099
0.02%
39,626,773
0.02%
39,975,488
0.00%
40,327,273
0.00%
40,682,153
0.00%
8,840
17,836
25,190
32,672
40,284
14,778
0.15%
11,181
0.20%
7,519
0.25%
7,586
0.33%
7,652
0.40%
7,720
0.35%
7,788
0.35%
7,856
0.35%
7,925
0.35%
800
0.35%
403
0.35%
407
0.35%
# of obese men treated with BELVIQ/Phentermine Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
6 70% $203
3%
6 70% $210
5%
6 70% $220
5%
6 70% $231
5%
6 70% $243
5%
Discount offered BELVIQ - total US Sales in men ($MM) BELVIQ/Phentermine - total US Sales in men ($MM) Total women # of women between 18 and 64 years old
% of women between 18 and 64 years old % of women between 18 and 64 years old that are obese
$4 $0 161,673,138 100,366,722
62.1% 35.8%
35,617,849
35,931,287
0.1%
36,247,482
0.20%
36,566,460
0.28%
36,888,245
0.36%
37,212,861
0.44%
37,540,334
0.16%
37,870,689
0.12%
38,203,951
0.08%
38,540,146
0.08%
38,879,299
0.08%
39,221,437
0.08%
39,566,586
0.08%
39,914,772
0.08%
40,266,022
0.08%
40,620,363
0.01%
40,977,822
0.00%
41,338,427
0.00%
35,931
72,495
102,386
132,798
163,737
60,065
0.60%
45,445
0.80%
30,563
1.00%
30,832
1.32%
31,103
1.60%
31,377
1.40%
31,653
1.40%
31,932
1.40%
32,213
1.40%
3,250
1.40%
1,639
1.40%
1,654
1.40%
# of obese women treated with BELVIQ/Phentermine Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
6 70% $203
3%
6 70% $210
5%
6 70% $220
5%
6 70% $231
5%
6 70% $243
5%
Discount offered BELVIQ - total US Sales in women ($MM) BELVIQ/Phentermine - total US Sales in women ($MM) BELVIQ - total US Sales ($MM) BELVIQ/Phentermine - total US Sales ($MM) BELVIQ + BELVIQ/Phentermine- total US Sales ($MM) Total revenue on US sales to ARNA $0 $0 $0 $0 $0 $0
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2012E 504,832,526
0.10%
2013E 505,337,358
0.10%
2014E 505,842,695
0.10%
2015E 506,348,538
0.10%
2016E 506,854,887
0.10%
2017E 507,361,742
0.10%
2018E 507,869,103
0.10%
2019E 508,376,972
0.10%
2020E 508,885,349
0.10%
2021E 509,394,235
0.10%
2022E 509,903,629
0.10%
2023E 510,413,533
0.10%
2024E 510,923,946
0.10%
2025E 511,434,870
0.10%
2026E 511,946,305
0.10%
2027E 512,458,251
0.10%
2028E 512,970,710
0.10%
2029E 513,483,680
0.10%
Total men
% of men between 18 and 64 years old
241,263,217
63.5%
241,504,480
63.5%
241,745,984
63.5%
241,987,730
63.5%
242,229,718
63.5%
242,471,948
63.5%
242,714,420
63.5%
242,957,134
63.5%
243,200,091
63.5%
243,443,291
63.5%
243,686,735
63.5%
243,930,421
63.5%
244,174,352
63.5%
244,418,526
63.5%
244,662,945
63.5%
244,907,608
63.5%
245,152,515
63.5%
245,397,668
63.5%
153,242,963
20.0%
153,396,206
20.0%
153,549,602
20.0%
153,703,152
20.0%
153,856,855
20.0%
154,010,712
20.0%
154,164,722
20.0%
154,318,887
20.0%
154,473,206
20.0%
154,627,679
20.0%
154,782,307
20.0%
154,937,089
20.0%
155,092,026
20.0%
155,247,118
20.0%
155,402,366
20.0%
155,557,768
20.0%
155,713,326
20.0%
155,869,039
20.0%
30,648,593
30,679,241 -
30,709,920 -
30,740,630 -
30,771,371
0.02%
30,802,142
0.04%
30,832,944
0.06%
30,863,777
0.08%
30,894,641
0.10%
30,925,536
0.12%
30,956,461
0.14%
30,987,418
0.15%
31,018,405
0.16%
31,049,424
0.17%
31,080,473
0.18%
31,111,554
0.02%
31,142,665
0.01%
31,173,808
0.01%
# of obese men treated with BELVIQ Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
25% $0 251,591,877
62.1%
20% $7 252,852,355
62.1%
20% $5 255,392,287
62.1%
20% $2 255,647,679
62.1%
20% $2 255,903,327
62.1%
$0 251,843,469
62.1%
$0 252,095,312
62.1%
$0 252,347,408
62.1%
$3 252,599,755
62.1%
156,188,296
20.0%
156,344,484
20.0%
156,500,829
20.0%
156,657,330
20.0%
156,813,987
20.0%
156,970,801
20.0%
157,127,772
20.0%
157,284,900
20.0%
157,442,184
20.0%
157,599,627
20.0%
157,757,226
20.0%
157,914,983
20.0%
158,072,898
20.0%
158,230,971
20.0%
158,389,202
20.0%
158,547,592
20.0%
158,706,139
20.0%
158,864,845
20.0%
31,237,659
31,268,897
31,300,166
31,331,466
31,362,797
0.08%
31,394,160
0.16%
31,425,554
0.24%
31,456,980
0.32%
31,488,437
0.40%
31,519,925
0.48%
31,551,445
0.56%
31,582,997
0.60%
31,614,580
0.64%
31,646,194
0.68%
31,677,840
0.72%
31,709,518
0.07%
31,741,228
0.04%
31,772,969
0.04%
# of obese women treated with BELVIQ Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
Discount offered BELVIQ - total EU Sales in women ($MM) BELVIQ - total EU Sales ($MM) Total revenue on EU sales to ARNA $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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2012E 49,060,054
0.20%
2013E 49,160,137
0.20%
2014E 49,260,423
0.20%
2015E 49,360,915
0.20%
2016E 49,461,611
0.20%
2017E 49,562,513
0.20%
2018E 49,663,620
0.20%
2019E 49,764,934
0.20%
2020E 49,866,454
0.20%
2021E 49,968,182
0.20%
2022E 50,070,117
0.20%
2023E 50,172,260
0.20%
2024E 50,274,611
0.20%
2025E 50,377,172
0.20%
2026E 50,479,941
0.20%
2027E 50,582,920
0.20%
2028E 50,686,109
0.20%
2029E 50,789,509
0.20%
Total men
% of men between 18 and 64 years old
24,538,235
63.5%
24,588,293
63.5%
24,638,454
63.5%
24,688,716
63.5%
24,739,081
63.5%
24,789,549
63.5%
24,840,119
63.5%
24,890,793
63.5%
24,941,570
63.5%
24,992,451
63.5%
25,043,436
63.5%
25,094,525
63.5%
25,145,717
63.5%
25,197,015
63.5%
25,248,417
63.5%
25,299,923
63.5%
25,351,535
63.5%
25,403,252
63.5%
15,585,931
20.0%
15,617,727
20.0%
15,649,587
20.0%
15,681,512
20.0%
15,713,502
20.0%
15,745,558
20.0%
15,777,679
20.0%
15,809,865
20.0%
15,842,117
20.0%
15,874,435
20.0%
15,906,819
20.0%
15,939,269
20.0%
15,971,785
20.0%
16,004,367
20.0%
16,037,016
20.0%
16,069,732
20.0%
16,102,514
20.0%
16,135,363
20.0%
3,117,186
3,123,545
3,129,917
3,136,302
0.04%
3,142,700
0.08%
3,149,112
0.11%
3,155,536
0.14%
3,161,973
0.10%
3,168,423
0.05%
3,174,887
0.05%
3,181,364
0.05%
3,187,854
0.05%
3,194,357
0.05%
3,200,873
0.05%
3,207,403
0.05%
3,213,946
0.05%
3,220,503
0.05%
3,227,073
0.05%
3,162
0.20%
1,584
0.30%
1,587
0.40%
1,591
0.40%
1,594
0.45%
1,597
0.45%
1,600
0.45%
1,604
0.45%
1,607
0.45%
1,610
0.45%
1,614
0.45%
# of obese men treated with BELVIQ/Phentermine Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
Discount offered BELVIQ - total South Korean Sales in men ($MM) BELVIQ/Phentermine - total South Korean Sales in men ($MM) Total women
% of women between 18 and 64 years old
22% $0 $0 24,521,819
62.1%
20% $1 $0 24,722,530
62.1%
20% $1 $0 24,772,964
62.1%
20% $2 $0 24,823,501
62.1%
20% $1 $3 24,874,141
62.1%
20% $1 $4 24,924,884
62.1%
20% $1 $6 24,975,731
62.1%
20% $1 $6 25,026,681
62.1%
20% $1 $7 25,077,736
62.1%
20% $1 $8 25,128,894
62.1%
20% $1 $8 25,180,157
62.1%
20% $1 $9 25,231,525
62.1%
20% $1 $9 25,282,997
62.1%
20% $1 $9 25,334,574
62.1%
20% $1 $9 25,386,257
62.1%
$0 $0 24,571,843
62.1%
$0 $0 24,621,970
62.1%
$0 $0 24,672,199
62.1%
15,223,151
20.0%
15,254,206
20.0%
15,285,325
20.0%
15,316,507
20.0%
15,347,752
20.0%
15,379,062
20.0%
15,410,435
20.0%
15,441,872
20.0%
15,473,374
20.0%
15,504,939
20.0%
15,536,569
20.0%
15,568,264
20.0%
15,600,023
20.0%
15,631,847
20.0%
15,663,736
20.0%
15,695,690
20.0%
15,727,710
20.0%
15,759,794
20.0%
3,044,630
3,050,841
3,057,065
3,063,301
0.16%
3,069,550
0.32%
3,075,812
0.44%
3,082,087
0.56%
3,088,374
0.40%
3,094,675
0.20%
3,100,988
0.20%
3,107,314
0.20%
3,113,653
0.20%
3,120,005
0.20%
3,126,369
0.20%
3,132,747
0.20%
3,139,138
0.20%
3,145,542
0.20%
3,151,959
0.20%
12,353
0.80%
6,189
1.20%
6,202
1.60%
6,215
1.60%
6,227
1.80%
6,240
1.80%
6,253
1.80%
6,265
1.80%
6,278
1.80%
6,291
1.80%
6,304
1.80%
# of obese women treated with BELVIQ/Phentermine Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
Discount offered BELVIQ - total South Korean Sales in women ($MM) BELVIQ/Phentermine - total South Korean Sales in women ($MM) BELVIQ - total South Korean Sales ($MM) BELVIQ/Phentermine - total South Korean Sales ($MM) BELVIQ + BELVIQ/Phentermine- total South Korea Sales ($MM) Total revenue on South Korean sales to ARNA $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
22% $2 $0 $2 $0 $2 $1
20% $4 $0 $5 $0 $5 $2
20% $5 $0 $7 $0 $7 $2
20% $7 $0 $9 $0 $9 $3
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2012E 23,299,716
0.27%
2013E 23,362,625
0.27%
2014E 23,425,704
0.27%
2015E 23,488,954
0.27%
2016E 23,552,374
0.27%
2017E 23,615,965
0.27%
2018E 23,679,728
0.27%
2019E 23,743,664
0.27%
2020E 23,807,772
0.27%
2021E 23,872,053
0.27%
2022E 23,936,507
0.27%
2023E 24,001,136
0.27%
2024E 24,065,939
0.27%
2025E 24,130,917
0.27%
2026E 24,196,070
0.27%
2027E 24,261,400
0.27%
2028E 24,326,905
0.27%
2029E 24,392,588
0.27%
Total men
% of men between 18 and 64 years old
11,699,718
63.5%
11,731,307
63.5%
11,762,981
63.5%
11,794,741
63.5%
11,826,587
63.5%
11,858,519
63.5%
11,890,537
63.5%
11,922,641
63.5%
11,954,833
63.5%
11,987,111
63.5%
12,019,476
63.5%
12,051,928
63.5%
12,084,469
63.5%
12,117,097
63.5%
12,149,813
63.5%
12,182,617
63.5%
12,215,510
63.5%
12,248,492
63.5%
7,431,300
20.0%
7,451,365
20.0%
7,471,483
20.0%
7,491,656
20.0%
7,511,884
20.0%
7,532,166
20.0%
7,552,503
20.0%
7,572,895
20.0%
7,593,341
20.0%
7,613,843
20.0%
7,634,401
20.0%
7,655,014
20.0%
7,675,682
20.0%
7,696,406
20.0%
7,717,187
20.0%
7,738,023
20.0%
7,758,916
20.0%
7,779,865
20.0%
1,486,260
1,490,273 -
1,494,297 -
1,498,331
0.04%
1,502,377
0.08%
1,506,433
0.11%
1,510,501
0.14%
1,514,579
0.10%
1,518,668
0.05%
1,522,769
0.05%
1,526,880
0.05%
1,531,003
0.05%
1,535,136
0.05%
1,539,281
0.05%
1,543,437
0.05%
1,547,605
0.05%
1,551,783
0.05%
1,555,973
0.05%
1,515
0.20%
759
0.30%
761
0.40%
763
0.40%
766
0.45%
768
0.45%
770
0.45%
772
0.45%
774
0.45%
776
0.45%
778
0.45%
# of obese men treated with BELVIQ/Phentermine Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
Discount offered BELVIQ - total Taiwan Sales in men ($MM) BELVIQ/Phentermine - total Taiwan Sales in men ($MM) Total women
% of women between 18 and 64 years old
22% $0 $0 11,725,987
62.1%
20% $0 $0 11,853,141
62.1%
20% $1 $0 11,885,145
62.1%
20% $1 $0 11,917,235
62.1%
20% $1 $1 11,949,411
62.1%
20% $0 $2 11,981,675
62.1%
20% $0 $3 12,014,025
62.1%
20% $0 $3 12,046,463
62.1%
20% $0 $4 12,078,988
62.1%
20% $0 $4 12,111,602
62.1%
20% $0 $4 12,144,303
62.1%
20% $0 $4 12,177,093
62.1%
20% $0 $4 12,209,971
62.1%
20% $0 $4 12,242,938
62.1%
20% $0 $4 12,275,994
62.1%
$0 $0 11,757,647
62.1%
$0 $0 11,789,393
62.1%
$0 $0 11,821,224
62.1%
7,279,495
20.0%
7,299,150
20.0%
7,318,858
20.0%
7,338,619
20.0%
7,358,433
20.0%
7,378,301
20.0%
7,398,222
20.0%
7,418,197
20.0%
7,438,226
20.0%
7,458,310
20.0%
7,478,447
20.0%
7,498,639
20.0%
7,518,885
20.0%
7,539,186
20.0%
7,559,542
20.0%
7,579,953
20.0%
7,600,419
20.0%
7,620,940
20.0%
1,455,899
1,459,830
1,463,772
1,467,724
0.16%
1,471,687
0.32%
1,475,660
0.44%
1,479,644
0.56%
1,483,639
0.40%
1,487,645
0.20%
1,491,662
0.20%
1,495,689
0.20%
1,499,728
0.20%
1,503,777
0.20%
1,507,837
0.20%
1,511,908
0.20%
1,515,991
0.20%
1,520,084
0.20%
1,524,188
0.20%
2,348
4,709
6,493
8,286
0.00%
5,935
0.80%
2,975
1.20%
2,983
1.60%
2,991
1.60%
2,999
1.80%
3,008
1.80%
3,016
1.80%
3,024
1.80%
3,032
1.80%
3,040
1.80%
3,048
1.80%
# of obese women treated with BELVIQ/Phentermine Average # of prescriptions (Rx)/patient % compliance Average cost/prescription (Rx)
% price increase
6 70% $105
5%
6 70% $110
5%
6 70% $116
5%
70% $121
5%
Discount offered BELVIQ - total Taiwan Sales in women ($MM) BELVIQ/Phentermine - total Taiwan Sales in women ($MM) BELVIQ - total Taiwan Sales ($MM) BELVIQ/Phentermine - total Taiwan Sales ($MM) BELVIQ + BELVIQ/Phentermine- total Taiwan Sales ($MM) % increase Total revenue on Taiwan sales to ARNA $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
22% $1 $0 $1 $0 $1
20% $2 $0 $2 $0 $2 116%
20% $3 $0 $3 $0 $3 45% $1
20% $3 $0 $4 $0 $4 34% $2
$0
$1
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Manufacturing plant in Switzerland provides 10-year tax-break: In 2008, Arenas Swiss subsidiary, Arena GmbH, purchased a plant in Switzerland from Siegfried, a company which provides custom drug development services, including drug substances and drug manufacturing, for $38.7M ($30.7M in cash and 1.5M shares valued at $8M). Arena plans to manufacture BELVIQ at this facility and sell it to its partners. This subsidiary has been granted a conditional incentive tax holiday for its operations in Switzerland, which Arena expects will exempt it from the majority of potential Swiss income taxes. This tax holiday will continue for a period of up to 10 years, not to extend beyond December 31, 2022. Arena has guided that, as
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a result of this tax holiday, it expects to pay lower overall taxes during that period, at a tax rate in the range of 15-20%. Arena: Quarterly P&L ($MM)
($MM) Total revenue on US sales to ARNA Total revenue on EU sales to ARNA - probability-adjusted Total revenue on SK sales to ARNA - probability-adjusted Total revenue onTaiwan sales to ARNA - probability-adjusted Total revenue on sales to ARNA Manufacturing services Milestones/License Fees - Eisai/Others Milestones/License Fees - EU partnership Milestones/License Fees - Ildong Milestones/License Fees - CYB Total Revenues Cost of Goods Sold Gross Profit R&D SG&A Total Operating Expenses
% Revenues
2009A 0.0 0.0 0.0 0.0 0.0 6.6 3.8 0.0 0.0 0.0 10.4 6.5 3.9 110.2 25.2 142.2
1369.4%
2010A 0.0 0.0 0.0 0.0 0.0 7.1 9.6 0.0 0.0 0.0 16.6 7.4 9.2 75.5 27.9 105.6
635.4%
2011A 0.0 0.0 0.0 0.0 0.0 5.3 7.4 0.0 0.0 0.0 12.7 8.1 4.6 58.7 24.2 87.4
687.3%
Q1:12A 0.0 0.0 0.0 0.0 0.0 1.3 0.9 0.0 0.0 0.0 2.2 0.8 1.4 14.5 6.4 21.0 (19.6)
Q2:12A 0.0 0.0 0.0 0.0 0.0 1.0 20.9 0.0 0.0 0.0 22.0 0.7 21.3 14.1 5.2 19.5 1.9
Q3:12A 0.0 0.0 0.0 0.0 0.0 0.6 0.9 0.0 0.0 0.0 1.5 1.4 0.1 11.6 7.4 19.2 (19.1)
Q4:12A 0.0 0.0 0.0 0.0 0.0 0.9 0.9 0.0 0.2 0.0 1.9 0.8 1.1 13.9 7.3 21.4 (20.3)
2012A 0.0 0.0 0.0 0.0 0.0 3.8 23.6 0.0 0.2 0.0 27.6 3.7 23.9 54.1 26.2 81.0
293.7%
Q1:13A 0.0 0.0 0.0 0.0 0.0 0.8 1.5 0.0 0.1 0.0 2.4 2.1 0.3 14.0 7.3 21.3 (21.0)
Q2:13A 1.3 0.0 0.0 0.0 1.3 1.0 66.5 0.0 0.2 0.0 68.9 1.6 67.3 18.8 8.6 27.4 39.9
Q3:13E 1.9 0.0 0.0 0.0 1.9 0.8 1.5 0.0 0.2 0.0 4.3 1.3 3.0 20.0 8.7 28.9 (25.9)
Q4:13E 2.6 0.0 0.0 0.0 2.6 0.8 2.0 0.0 0.2 0.0 5.5 1.5 4.0 22.0 8.8 31.0 (27.0)
2013E 5.8 0.0 0.0 0.0 5.8 3.2 71.5 0.0 0.6 0.0 81.1 6.5 74.5 74.8 33.4 108.5
133.9%
Q1:14E 3.2 0.0 0.0 0.0 3.2 0.9 1.5 0.0 0.2 0.0 5.7 1.8 4.0 14.0 8.7 22.9 (18.9)
Q2:14E 3.8 0.0 0.0 0.0 3.8 0.9 1.5 0.0 0.2 0.0 6.3 1.9 4.4 14.0 8.8 23.0 (18.6)
Q3:14E 4.6 0.0 0.0 0.0 4.6 0.9 1.5 0.0 0.2 0.1 7.2 2.2 5.1 14.0 8.7 22.9 (17.8)
Q4:14E 5.5 0.0 0.0 0.0 5.5 0.9 11.5 0.0 0.2 0.1 18.2 2.4 15.8 14.0 8.8 23.0 (7.2)
2014E 17.0 0.0 0.0 0.0 17.0 3.6 16.0 0.0 0.6 0.2 37.5 8.3 29.2 56.0 35.0 91.7
244.7%
2015E 27.6 0.0 0.6 0.4 28.5 0.0 16.0 50.0 3.0 0.2 97.7 5.4 92.3 57.1 35.7 93.5
95.7%
Operating Income
% Revenues
(138.4)
(96.4)
(82.8)
(57.1)
(34.0)
-42.0%
(62.5)
-166.8%
(1.2)
-1.2%
Total Non-Operating Income Pretax Income Income tax expense Tax Rate Net Income - Operations Non-Recurring Gains (Losses) Net Income - Reported Basic EPS Diluted EPS Shares outstanding (basic) Shares outstanding (diluted)
(14.8) (153.2) 0.0 0.0% (153.2) 0.0 (153.2) ($1.82) ($1.82) 84.34 123.52
(28.2) (124.5) 0.0 0.0% (124.5) 0.0 (124.5) ($1.14) ($1.14) 109.6 150.1
(28.7) (111.5) 0.0 0.0% (111.5) 0.0 (111.5) ($0.80) ($0.80) 139.2 181.6
(9.8) (29.4) 0.0 0.0% (29.4) 0.0 (29.4) ($0.18) ($0.18) 164.2 205.0
(24.0) (22.1) 0.0 0.0% (22.1) 0.0 (22.1) ($0.12) ($0.12) 190.3 202.5
3.6 (15.5) 0.0 0.0% (15.5) 0.0 (15.5) ($0.07) ($0.07) 213.9 233.9
(1.0) (21.3) 0.0 0.0% (21.3) 0.0 (21.3) ($0.10) ($0.10) 217.3 234.7
(31.2) (88.3) 0.0 0.0% (88.3) 0.0 (88.3) ($0.45) ($0.45) 196.4 219.1
2.1 (18.9) 0.0 0.0% (18.9) 0.0 (18.9) ($0.09) ($0.09) 217.5 236.3
0.2 40.1 0.0 0.0% 40.1 0.0 40.1 $0.18 $0.18 217.9 224.5
(1.8) (27.7) 0.0 0.0% (27.7) 0.0 (27.7) ($0.13) ($0.13) 219.3 234.8
(1.8) (28.8) 0.0 0.0% (28.8) 0.0 (28.8) ($0.13) ($0.13) 220.4 235.9
(1.3) (35.3) 0.0 0.0% (35.3) 0.0 (35.3) ($0.16) ($0.16) 218.8 232.9
(1.8) (20.7) 0.0 0.0% (20.7) 0.0 (20.7) ($0.08) ($0.08) 246.5 262.1
(1.8) (20.4) 0.0 0.0% (20.4) 0.0 (20.4) ($0.08) ($0.08) 247.8 263.4
(1.8) (19.6) 0.0 0.0% (19.6) 0.0 (19.6) ($0.08) ($0.08) 249.0 264.7
(1.8) (9.0) 0.0 0.0% (9.0) 0.0 (9.0) ($0.04) ($0.04) 250.3 266.1
(7.2) (69.7) 0.0 0.0% (69.7) 0.0 (69.7) ($0.28) ($0.28) 248.4 264.1
(7.2) (8.4) 0.0 0.0% (8.4) 0.0 (8.4) ($0.03) ($0.03) 255.3 271.4
2009A 0.0 0.0 0.0 0.0 0.0 6.6 3.8 0.0 0.0 0.0 10.4 6.5 3.9 110.2 25.2 142.2
1369.4%
2010A 0.0 0.0 0.0 0.0 0.0 7.1 9.6 0.0 0.0 0.0 16.6 7.4 9.2 75.5 27.9 105.6
635.4%
2011A 0.0 0.0 0.0 0.0 0.0 5.3 7.4 0.0 0.0 0.0 12.7 8.1 4.6 58.7 24.2 87.4
687.3%
2012A 0.0 0.0 0.0 0.0 0.0 3.8 23.6 0.0 0.2 0.0 27.6 3.7 23.9 54.1 26.2 81.0
293.7%
2013E 5.8 0.0 0.0 0.0 5.8 3.2 71.5 0.0 0.6 0.0 81.1 6.5 74.5 74.8 33.4 108.5
133.9%
2014E 17.0 0.0 0.0 0.0 17.0 3.6 16.0 0.0 0.6 0.2 37.5 8.3 29.2 56.0 35.0 91.7
244.7%
2015E 27.6 0.0 0.6 0.4 28.5 0.0 16.0 50.0 3.0 0.2 97.7 5.4 92.3 57.1 35.7 93.5
95.7%
2016E 38.5 2.8 1.3 0.8 43.4 0.0 71.0 25.0 0.6 0.2 140.2 8.1 132.1 58.2 36.4 95.4
68.0%
2017E 49.9 6.3 1.9 1.1 59.2 0.0 6.0 0.0 0.6 0.2 66.0 11.0 55.0 58.6 37.1 96.5
146.1%
2018E 92.3 9.9 2.6 1.5 106.3 0.0 55.0 25.0 0.0 0.2 186.5 16.4 170.1 59.0 37.9 97.6
52.3%
2019E 120.1 14.0 6.4 3.4 144.0 0.0 0.0 0.0 0.0 0.2 144.2 21.7 122.4 59.4 38.6 98.7
68.5%
2020E 150.9 18.2 8.0 4.2 181.3 0.0 55.0 25.0 0.0 0.2 261.5 27.1 234.4 53.8 39.4 93.9
35.9%
2021E 209.5 23.0 11.1 5.7 249.3 0.0 0.0 0.0 0.0 0.2 249.5 36.9 212.6 50.0 40.2 90.9
36.4%
2022E 269.1 28.2 11.7 6.0 315.0 0.0 100.0 25.0 0.0 0.2 440.2 46.3 393.9 47.5 41.0 89.2
20.3%
2023E 249.7 31.7 13.8 7.1 302.3 0.0 0.0 0.0 0.0 0.2 302.5 44.4 258.1 45.8 41.8 88.3
29.2%
2024E 265.7 35.6 14.6 7.4 323.3 0.0 0.0 37.5 0.0 0.0 360.8 47.3 313.5 44.8 42.7 88.1
24.4%
2025E 282.7 39.7 15.4 7.8 345.7 0.0 0.0 37.5 0.0 0.0 383.2 50.4 332.8 44.2 43.5 88.4
23.1%
2026E 300.7 44.2 16.3 8.2 369.4 0.0 150.0 0.0 0.0 0.0 519.4 53.7 465.8 26.5 44.4 71.6
13.8%
2027E 303.2 4.4 17.2 8.7 333.5 0.0 0.0 0.0 0.0 0.0 333.5 48.6 284.8 15.9 45.3 61.9
18.6%
2028E 305.1 2.2 17.2 8.7 333.2 0.0 0.0 0.0 0.0 0.0 333.2 48.6 284.6 9.5 46.2 55.7
16.7%
2029E 308.0 2.2 17.2 8.7 336.2 0.0 0.0 0.0 0.0 0.0 336.2 49.0 287.2 5.7 47.1 52.8
15.7%
Operating Income
% Revenues
(138.4)
(96.4)
(82.8)
(57.1)
(34.0)
-42.0%
(62.5)
-166.8%
(1.2)
-1.2%
36.7
26.2%
(41.5)
-62.8%
72.6
38.9%
23.7
16.4%
140.5
53.7%
121.7
48.8%
304.8
69.2%
169.7
56.1%
225.4
62.5%
244.4
63.8%
394.2
75.9%
222.9
66.9%
228.9
68.7%
234.3
69.7%
Total Non-Operating Income Pretax Income Income tax expense Tax Rate Net Income - Operations Non-Recurring Gains (Losses) Net Income - Reported Basic EPS Diluted EPS Shares outstanding (basic) Shares outstanding (diluted)
(14.8) (153.2) 0.0 0.0% (153.2) 0.0 (153.2) ($1.82) ($1.82) 84.34 123.52
(28.2) (124.5) 0.0 0.0% (124.5) 0.0 (124.5) ($1.14) ($1.14) 109.6 150.1
(28.7) (111.5) 0.0 0.0% (111.5) 0.0 (111.5) ($0.80) ($0.80) 139.2 181.6
(31.2) (88.3) 0.0 0.0% (88.3) 0.0 (88.3) ($0.45) ($0.45) 196.4 219.1
(1.3) (35.3) 0.0 0.0% (35.3) 0.0 (35.3) ($0.16) ($0.16) 218.8 232.9
(7.2) (69.7) 0.0 0.0% (69.7) 0.0 (69.7) ($0.28) ($0.28) 248.4 264.1
(7.2) (8.4) 0.0 0.0% (8.4) 0.0 (8.4) ($0.03) ($0.03) 255.3 271.4
(7.2) 29.5 0.0 0.0% 29.5 0.0 29.5 $0.11 $0.11 260.4 276.8
(7.2) (48.7) 0.0 0.0% (48.7) 0.0 (48.7) ($0.18) ($0.18) 265.6 282.3
0.0 72.6 3.6 5.0% 68.9 0.0 68.9 $0.25 $0.24 270.9 288.0
0.0 23.7 1.9 8.0% 21.8 0.0 21.8 $0.08 $0.07 276.3 293.7
0.0 140.5 21.1 15.0% 119.4 0.0 119.4 $0.42 $0.40 281.8 299.6
0.0 121.7 18.3 15.0% 103.5 0.0 103.5 $0.36 $0.34 287.5 305.6
0.0 304.8 61.0 20.0% 243.8 0.0 243.8 $0.83 $0.78 293.2 311.7
0.0 169.7 33.9 20.0% 135.8 0.0 135.8 $0.45 $0.43 299.1 318.0
0.0 225.4 56.3 25.0% 169.0 0.0 169.0 $0.55 $0.52 305.1 324.3
0.0 244.4 61.1 25.0% 183.3 0.0 183.3 $0.59 $0.55 311.2 330.8
0.0 394.2 98.5 25.0% 295.6 1.0 296.6 $0.93 $0.88 317.4 337.4
0.0 222.9 55.7 25.0% 167.2 2.0 169.2 $0.52 $0.49 323.7 344.2
0.0 228.9 57.2 25.0% 171.7 3.0 174.7 $0.53 $0.50 330.2 351.1
3.0 237.3 59.3 25.0% 178.0 4.0 182.0 $0.54 $0.51 336.8 358.1
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BELVIQ Sales: For 2Q13, Eisai disclosed gross revenue of $10M from BELVIQ sales, corresponding to ~50,000 bottles of BELVIQ shipped to its distributors (average WAC ~$200). The net sales were ~$4.2M, and thus Arena recognized $1.3M in revenues, given the 31.5% transfer price, from BELVIQ sales. BELVIQ Savings Program: Eisai has a 15-Day free trial voucher program in which patients can receive 15 days of BELVIQ for free. Also, a Savings Card is offered, through which patients receive up to $75 off each month for 12 months ($75 off for cash-pay patients; up to $75 off for patients with insurance coverage having an initial $50 or more co-pay each month). Reimbursement Efforts: According to Arena, Eisai has approximately 50 reimbursement specialists and 3 healthcare economists working on reimbursement for BELVIQ. Eisais stated
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goal is to improve reimbursement from the current ~ 30% to as much as 50% by the end of its fiscal year (March 2014). Consumer Launch: In September 2013, Arena reported that Eisais US launch campaign for BELVIQ has entered its consumer phase. Full page announcements were placed in major US magazines beginning in September, which are intended to educate consumers about BELVIQ as a weight loss treatment option. Also, Eisai has launched the BELIEVE EVERYDAY SUPPORT program for BELVIQ, which provides free support and savings, and includes an online portal. The program includes: a monthly savings card, one-year membership to the Lose It! app for calorie- and activity-tracking, nutrition information and meal planning tool, and motivational tips to help sustain weight loss efforts.
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BLOOM
Number of patients Duration Treatment groups 3,182 2 years BELVIQ 10 mg BID, Placebo
BLOSSOM
4,008 1 year BELVIQ 10 mg QD, BELVIQ 10 mg BID, Placebo
BLOOM-DM*
604 1 year BELVIQ 10 mg QD, BELVIQ 10 mg BID, Placebo BMI 27-45 kg/m2
Patient demographics
BMI 30-45 kg/m2, or 27-45 kg/m2 with 1 BMI 30-45 kg/m2, or 27-29.9 kg/m2 with co-morbid condition 1 co-morbid condition Required one or more of the following: hypertension, dyslipidemia, cardiovascular disease, impaired glucose tolerance, or sleep apnea 220 36 44 84% Caucasian (67%) African-American (19%) Hispanic (12%) Individual 15-60 min counseling on nutrition and exercise at weeks 2/4 and then monthly 220 36 44 80% Caucasian (67%) African-American (20%) Hispanic (11%) Individual counseling on nutrition and exercise at baseline, weeks 1/2/4 and then monthly
Comorbidities for inclusion Mean baseline weight, lbs Mean BMI, kg/m2 Average age (years) Female Proportion Ethnicity
Type 2 diabetes 228 36 53 54% Caucasian (61%) African-American (21%) Hispanic (14%) Individual 15-60 min counseling on nutrition and exercise at weeks 2/4 and then monthly
1) proportion of patients 5% weight loss 2) mean change in body weight from baseline 3) proportion of patients 10% weight loss September 2009 November 2010
Source: Cowen and Company, Arena Pharmaceuticals, *BLOOM-DM was not a pivotal trial
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The BLOOM trial included serial 2D echocardiogram monitoring for all subjects, to evaluate for changes consistent with FDA-defined valvulopathy. ECHOs were performed at baseline, 6, 12, 18, and 24 months, and 6- and 12-month results were reviewed by a DSMB. Although the primary efficacy analysis in BLOOM was based on one-year results, the safety evaluation spanned two years. BLOSSOM and BLOOM-DM were one-year trials, which began in December 2007, and the FDA allowed Arena to enroll patients with pre-existing valvulopathy into both trials. ECHOs were collected at baseline, 6, and 12 months for database purposes. Enrollment in the BLOOM-DM trial was initially slow, in part due to a fairly high level of competition for patients among numerous U.S. diabetes studies, but was completed in August 2009, totaling 604 subjects with type 2 diabetes managed on oral medications.
Number of Patients Average BMI, kg/m Average Weight Average Age, years Female Proportion
Source: Cowen and Company, Arena Pharmaceuticals
2
84%
1) % average weight loss: BELVIQ patients had an average weight loss of 5.8% (12.7 lbs) vs. 2.2% (4.7 lbs) for placebo, for a placebo-adjusted average weight loss of 3.6%, or 8 lbs. This
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result was statistically significant; it did not, however, meet FDAs efficacy benchmark of a 5% difference in average weight loss between therapy and placebo. 2) % of patients losing at least 5% of their weight: 47.5% of BELVIQ patients lost at least 5% of baseline body weight, compared to 20.3% of placebo patients. With these data, BELVIQ met the threshold specified in FDA's draft guidance for efficacy of obesity drugs. 3) % of patients losing at least 10% of their weight: 22.6% of BELVIQ patients in the trial lost at least 10% of body weight, compared to 7.7% of placebo patients. Arena presented updated data at ADA 2009 from an analysis of those patients who completed one year of treatment per protocol. In this population, the average weight loss was 18 lbs (8%) in the drug arm, compared to 7.3 lbs (3.2%) in the placebo group. 66.4% of BELVIQ completers lost at least 5% of baseline body weight, compared to 32.1% of placebo patients (p<0.0001), while 36.2% of BELVIQ completers lost at least 10% of body weight, compared to 13.6% for placebo (p<0.0001). BLOOM Trial: Efficacy Data
BLOOM (n=3,182) Key Endpoints n (ITT-LOCF) Mean Weight Loss (%) (ITT-LOCF) 5% weight loss (ITT-LOCF) 10% weight loss (ITT-LOCF) n (Completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate
Source: Cowen and Company, Arena Pharmaceuticals
BELVIQ 10mg BID n=1,538 5.8% 47.5% 22.6% n=583 8.1% 66.4% 36.2% 38%
Placebo n=1,499 2.2% 20.3% 7.7% n=737 3.3% 32.1% 13.6% 49%
Difference
p-value
BELVIQ also improved a number of secondary parameters to a greater extent than placebo (p<0.001), including waist circumference (-6.8cm vs. -3.9cm), triglycerides (-6.15% vs. 0.14%), hs-CRP (-1.19mg/L vs. -0.17mg/L), hemoglobin A1C (-0.04% vs. 0.03%) and quality of life (as measured by the IWQOL-LITE scale, 12.4 for BELVIQ vs. 10.7 for placebo, p<0.001). With BELVIQ treatment, at 52 weeks, there were also significant reductions from baseline in systolic and diastolic blood pressures, as well as heart rate, compared with placebo.
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In BLOOM, the primary endpoint at year 2 was the proportion of patients losing 5% of baseline body weight at the end of year 1 who maintained this weight reduction. In BELVIQ patients who had 5% weight loss at 52 weeks, more patients who continued to receive BELVIQ in year 2 maintained this loss, compared to those on placebo (67.9% vs. 50.3%, p<0.001). The mean body weight was lower in patients treated with BELVIQ for two years compared with mean body weight in patients on placebo for both years.
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Headache Upper respiratory infection Nasopharyngitis Dizziness Nausea Sinusitis Diarrhea Urinary tract infection Constipation Back pain Fatigue Dry mouth Gastroenteritis (viral cause) Influenza Arthralgia Cough Vomiting Pharyngolaryngeal pain Bronchitis Sinus congestion Pain in extremity Procedural pain Insomnia
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The trial achieved all three of its co-primary efficacy endpoints (% of patients losing 5% body weight, average weight loss, and % of patients losing 10% of their weight) with p<0.0001. BLOSSOM Trial: Baseline Patient Characteristics
Number Of Patients Average BMI, kg/m2 Average Weight Average Age, years Female Proportion Baseline Valvulopathy
Source: Cowen and Company, Arena Pharmaceuticals
1) % average weight loss: BELVIQ patients (10 mg BID group) had an average weight loss of 5.8% (12.8 lbs) vs. 2.8% (6.4 lbs) for placebo, resulting in a placebo-adjusted average weight loss of 3.0%, or 6.4 lbs. This result was statistically significant; just as in the BLOOM trial though, it did not meet FDAs efficacy benchmark of a 5% difference in average weight loss between therapy and placebo. The 10mg QD group had weaker efficacy, with just a 1.9% difference in placebo-adjusted weight loss. 2) % of patients losing at least 5% of their weight: 47.2% of BELVIQ patients (10 mg BID group) lost at least 5% of baseline body weight, compared to 25% of placebo patients. With these data, BELVIQ met the threshold specified in FDA's draft guidance for efficacy of obesity drugs. The 10mg QD group had weaker efficacy here, too, and the difference between it and placebo was less than the FDA guidance of the active arm being approximately double that of placebo. 3) % of patients losing at least 10% of their weight: 22.6% of BELVIQ patients (10 mg BID group) in the trial lost at least 10% of body weight, compared to 9.7% of placebo patients. Not surprisingly, the 10mg QD group had weaker efficacy here, too. BLOSSOM Trial: Efficacy Data
Key Endpoints n (ITT-LOCF) Mean Weight Loss (%) (ITT-LOCF) 5% weight loss (ITT-LOCF) 10% weight loss (ITT-LOCF) n (Completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate BELVIQ 10mg BID n=1,602 5.8% 47.2% 22.6% n=846 7.9% 63.2% 35.1% 53% BELVIQ 10mg QD n=801 4.7% 40.2% 17.4% n=418 6.5% 53.1% 26.3% 52% BLOSSOM (n=4,008) Difference from Placebo 10mg BID n=1,601 2.8% 25.0% 9.7% n=764 4.0% 34.9% 16.1% 48% 3.9% 28.3% 19.0% <0.001 <0.001 <0.001 2.5% 18.2% 10.2% <0.001 <0.001 <0.001 3.0% 22.2% 12.9% <0.001 <0.001 <0.001 1.9% 15.2% 7.7% <0.001 <0.001 <0.001 p-value Difference from 10mg QD p-value
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In addition to the weight loss efficacy, BELVIQ also improved a number of secondary parameters to a greater extent than placebo, including waist circumference (-6.3cm vs. -4.1cm, p<0.001), triglycerides (-4.3% vs. -0.9%, p=0.02), and quality of life (as measured by the IWQOL-LITE scale, 11.8 for BELVIQ vs. 10.0 for placebo, p<0.001). Systolic and diastolic blood pressures, as well as heart rate, decreased from baseline to week 52 in both the BELVIQ and placebo groups, but these differences were not statistically significant. BLOSSOM Trial: Secondary Endpoints
BELVIQ (n = 1,561) -6.3cm -4.3% 11.8 -2.3 bpm -1.9 mm Hg -1.9 mm Hg) Placebo (n = 1,541) -4.1cm -0.9% 10.0 -1.6 bpm -1.2 mm Hg -1.4 mm Hg p-value <0.001 0.02 <0.001 ND NS NS
Change in waist circumference Change in triglycerides Change in IWQOL-LITE Change in heart rate Change Systolic BP (mm Hg) Change Diastolic BP (mm Hg)
ND: not determined; NS: not significant
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Number Of Patients Average BMI, kg/m2 Average Weight Average Age, years Average HbA1c Level Female Proportion
Source: Cowen and Company, Arena Pharmaceuticals
1) % average weight loss: BELVIQ patients had an average weight loss of 4.5% vs. 1.5% for placebo, resulting in a placebo-adjusted average weight loss of 3.0%. This result was statistically significant; once again, as in BELVIQs previous two other Phase III trials, this result did not meet FDAs efficacy benchmark of a 5% difference in average weight loss between therapy and placebo. 2) % of patients losing at least 5% of their weight: 37.5% of BELVIQ patients lost at least 5% of baseline body weight, compared to 16.1% of placebo patients. With these data, BELVIQ met the threshold specified in FDA's draft guidance for efficacy of obesity drugs. 3) % of patients losing at least 10% of their weight: 16.3% of BELVIQ patients in the trial lost at least 10% of body weight, compared to 4.4% of placebo patients. BLOOM-DM Trial: Efficacy Data
BLOOM-DM (n=604) Key Endpoints n (ITT-LOCF) Mean Weight Loss (%) (ITT-LOCF) 5% weight loss (ITT-LOCF) 10% weight loss (ITT-LOCF) n (Completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate
Source: Cowen and Company, Arena Pharmaceuticals
BELVIQ 10mg BID n=251 4.5% 37.5% 16.3% n=169 5.5% 44.6% 20.8% 67%
Placebo n=248 1.5% 16.1% 4.4% n=157 1.7% 17.9% 5.8% 63%
Additionally, there were improvements noted in secondary endpoints pertaining to glycemic control, anthropometric measures, and cardiometabolic parameters. Glycemic control was evaluated by HbA1c, fasting glucose, fasting insulin, and calculated insulin resistance using
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homeostatic model assessment-insulin resistance (HOMA-IR). Mean HbA1c, fasting plasma glucose, and insulin resistance were significantly more decreased in the BELVIQ group compared with placebo. At 52 weeks, 50.4% of BELVIQ patients had HbA1c level 7%, compared with 26.3% of placebo patients. Waist circumference was also reduced significantly with BELVIQ treatment compared to placebo (-5.5 cm vs. -3.3 cm). Systolic and diastolic blood pressures decreased from baseline to week 52 in both the BELVIQ and placebo groups, with no significant differences noted, as was the case with triglyceride levels. Heart rate, however, did decrease significantly with BELVIQ vs. placebo (-2 bpm vs. -0.4 bpm). BLOOM-DM Trial: Secondary Endpoints
BELVIQ 10 mg BID (n = 251) -0.9% 50.4% -27.4 mg/dL -3 IU/ml -0.5 -10.7% -1.3 g/L 11.3 -5.5cm Placebo (n = 248) -0.4% 26.3% -11.9 mg/dL -1.6 IU/ml -0.2 -4.8% -0.6 g/L 10.2 -3.3cm p-value <0.001 <0.001 <0.001 0.12 0.022 0.054 0.15 0.221 0.001
Change in HbA1C % with HbA1C < 7% Change in fasting glucose Change in fasting insulin Change in HOMA-IR Change in triglycerides Change in hs-CRP Change in IWQOL-LITE Change in waist circumference
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Headache Back pain Nasopharyngitis Nausea Urinary tract infection Cough Symptomatic hypoglycemia Fatigue Gastroenteritis, viral Dizziness Influenza Procedural pain Hypertension Gastroenteritis Depression FDA-defined valvulopathy
BELVIQ 10 mg BID (n=256) n(%) 37 (14.5) 30 (11.7) 29 (11.3) 24 (9.4) 23 (9.0) 21 (8.2) 19 (7.4) 19 (7.4) 18 (7.0) 18 (7.0) 15 (5.9) 13 (5.1) 13 (5.1) 8 (3.1) 6 (2.3) 6(2.9)
Placebo (n=252) n(%) 18 (7.1) 20 (7.9) 25 (9.9) 20 (7.9) 15 (6.0) 11 (4.4) 16 (6.3) 10 (4.0) 11 (4.4) 16 (6.3) 13 (5.2) 5 (2.0) 8 (3.2) 5 (2.0) 5 (2.0) 1 (0.5)
With regard to cardiac valvulopathy, there was a trend toward increased new-onset valvulopathy at 52 weeks in the BELVIQ arm, although the trial was not powered to detect a statistically significant difference. At 52 weeks, one patient (0.5%) in the placebo group and 6 patients (2.9%) in the BELVIQ BID group had echocardiographic FDA-defined valvulopathy which was not present at baseline. The difference in incidence rates between the BELVIQ and placebo groups is higher than differences between the groups in the BLOOM and BLOSSOM studies, but given the small size of the trial, the differences in this trial did not reach statistical significance. Among those with pre-existing FDA-defined valvulopathy at baseline, 11.1% of BELVIQ patients and 12.5% of placebo patients experienced any increase in mitral regurgitation or aortic regurgitation score at week 52. This difference was not statistically significant.
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weight loss was similar to the weight loss achieved by responders on placebo of 9.5 kg (9.5%). The difference was that only 22.6% of placebo patients (541 of 2,393) met the at least 5% weight loss by week 12 threshold and were categorized as responders, versus the 49.3% of BELVIQ patients meeting that definition. Responder Analysis From the BLOOM and BLOSSOM Studies
Responders Mean baseline weight, kg Mean weight loss, kg Mean weight loss % % responders
Responders Mean baseline weight, kg Mean weight loss, kg Mean weight loss % % responders
Side-Effect Profile Will Carve Out a Niche, But Broader Use Is Likely Only In Combination With Phentermine
Assuming tumorigenesis concerns resulting from preclinical models are viewed by physicians to have no clinical relevance in humans, and that the same goes for the potential valvulopathy signal seen in BLOOM-DM, our consultants believe that BELVIQs otherwise clean side effect profile could carve out a niche in mildly obese people who seek medical treatment. They also suggest that BELVIQs ultimate potential will depend on combinability with phentermine.
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Consultants are unsure about how quickly a BELVIQ/phentermine combination therapy would be adopted by physicians. Some think that BELVIQ may be combined with phentermine offlabel immediately upon FDA approval. Many others note, however, that most physicians would be hesitant to combine the two because of their experience with Fen-Phen, and that material combination therapy will occur only after a large safety and efficacy trial has been conducted.
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Rat Carcinogenicity Data a Surprise in Briefing Documents, Made Risk/Benefit Unacceptable To AdCom
In FDA briefing documents prepared for the September 2010 BELVIQ AdCom review, it was revealed that a number of malignant tumors had developed in BELVIQs rat carcinogenicity studies, including tumors of breast, brain, peripheral nerve, skin and subcutis. However, only mammary tumors were increased to a statistically significant degree in both male and female rats, and therefore these were the most concerning to committee members. Moreover, the mammary tumors developed in female rats treated with BELVIQ at doses within sevenfold of the proposed clinical dose of 10mg BID, which was low enough that the FDA was concerned about the margin for safety. The FDAs concerns were further supported by the fact that preclinical studies had not produced similar tumors in mice. The agency suggested that this was likely due to lower levels of drug exposure achieved in mice. Moreover, the FDA did not accept Arenas studies linking increased tumorigenesis to elevated serum prolactin levels, which would suggest little clinical significance in humans. The FDA concluded that given the lack of a safety margin, an unresolved tumorigenic mechanism of action, and a patient population already at increased risk of breast cancer, the relevance of these findings in rats to human risk cannot be dismissed.
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astrocytoma adenocarcinoma fibroadenoma combined benign fibroma squamous carcinoma Schwannoma, all sites hepatocellular carcinoma hepatocellular adenoma combined follicular cell adenoma
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In August 2011, Arena also completed a clinical study designed to measure the concentration of BELVIQ in human cerebrospinal fluid (CSF) and plasma. The study enrolled nine obese but otherwise healthy volunteers who were administered BELVIQ 10 mg BID for seven days. On day seven, lumbar CSF and plasma were serially collected simultaneously over a 12-hour period. Measured human CSF and plasma exposures (mean AUC (standard deviation)) of 9.3 (+/-3.9) hr-ng/mL and 540 (+/-157) hr-ng/mL, respectively, were observed in the study. Arena also calculated the estimated ratio of BELVIQ exposure in the brain relative to plasma in humans using the mean brain: CSF exposure ratio of 101 from preclinical studies, with a range of 75-117. Based on these results, the company estimated that humans concentrate BELVIQ in the brain 14 times less compared to rats, and that plasma concentrations of BELVIQ in the rat carcinogenicity study at a dose with no astrocytoma were five times the anticipated human clinical exposure, providing a higher safety margin.
Positive FDA AdCom in May 2012 and U.S. Approval in June 2012
In May 2012, the FDA AdCom voted 18-4 in favor of BELVIQs approval. In June 2012, the FDA approved BELVIQ for the treatment of obesity. As per the label, BELVIQ is approved for the treatment of adults with an initial BMI 30 kg/m2 (obese) or 27 kg/m2 (overweight) in the presence of at least one weight-related comorbid condition.
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safety and efficacy of BELVIQ in the obese pediatric patient population. In addition, Arena is also required to conduct a cardiovascular outcomes trial (CVOT) to evaluate the effect of longterm treatment with BELVIQ on CV safety. Echocardiographic assessments will be included in this post-marketing CVOT. Arena is currently in discussions with FDA, is finalizing the protocols for these studies, and expects to initiate these studies sometime in 2013. Arena and Eisai have agreed on a protocol for the CVOT, and a draft was provided to FDA in February 2013. The company is required to complete the CVOT by December 31, 2017 and to submit the final report in 2018. As per the agreement with Eisai, Arena will be responsible for 10% of the CVOT expenses. Furthermore, Arena will be responsible for 50% of certain pediatric development expenses.
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7 ,9 7 7 ,3 2 9 r e c e p to r m o d u la to r s . T h e s e c o m p o u n d s a r e u s e fu l in p h a r m a c e u tic a l c o m p o s itio n s w h o s e 1 1 /1 4 /2 0 0 6 8 ,2 0 7 ,1 5 8 8 ,2 7 3 ,7 3 4 T h e p r e s e n t in v e n tio n p r o v id e s p r o c e s s e s a n d in te r m e d ia te s fo r th e p r e p a r a tio n o f 3 8 ,3 6 7 ,6 5 7 b e n z a z e p in e s a n d s a lts th e r e o f w h ic h c a n b e u s e fu l a s s e r o to n in ( 5 - H T ) r e c e p to r a g o n is ts fo r th e tr e a tm e n t o f, fo r e x a m p le , c e n tr a l n e r v o u s s y s te m d is o r d e r s s u c h a s o b e s ity . T h e p r e s e n t in v e n tio n is d ir e c te d to c r y s ta llin e fo r m s o f ( R ) - 8 - c h lo r o - 1 - m e th y l- 2 ,3 ,4 ,5 8 ,1 6 8 ,6 2 4 te tr a h y d r o - 1 H - 3 - b e n z a z e p in e , c o m p o s itio n s c o n ta in in g th e s a m e , p r e p a r a tio n s , a n d u s e s th e r e o f. T h e p r e s e n t in v e n tio n r e la te s to a c o m p o s itio n c o m p r is in g p h e n te r m in e a n d a s e le c tiv e 5 H T - 2 C r e c e p to r a g o n is t. In a d d itio n , th e in v e n tio n r e la te s to a c o m p o s itio n c o m p r is in g 8 ,1 5 3 ,6 2 1 p h e n te r m in e a n d a s e le c tiv e 5 H T - 2 C r e c e p to r a g o n is t h a v in g F o r m u la ( I) : o r a p h a r m a c e u tic a lly a c c e p ta b le s a lt, s o lv a te o r h y d r a te th e r e o f. T h e s e c o m p o s itio n s a r e u s e fu l in p h a r m a c e u tic a l c o m p o s itio n s w h o s e u s e in c lu d e s th e tr e a tm e n t o f o b e s ity . 1 2 /2 1 /2 0 0 5 1 2 /2 0 /2 0 0 5 6 /1 4 /2 0 0 4 5 /2 7 /2 0 1 1 6 /1 4 /2 0 1 2
7 /1 7 /2 0 0 3
1 2 /2 1 /2 0 0 4
1 2 /2 3 /2 0 0 4
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Underweight Healthy weight Overweight Mild Obesity Moderate Obesity Severe Obesity
BMI (kg/m2) Below 18.5 18.5 to 24.9 25.0 to 29.9 30 to 34.9 35 to 39.9 40 or higher
Obesity Class
I II III
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Because of the diverse mechanisms believed to underlie weight control, a broad array of approaches has been attempted to address this large and growing healthcare issue. Diet, increased physical activity, and behavioral modification are the mainstay strategies for weight loss and maintenance of healthy body weight. While such lifestyle changes can be effective in reducing body fat and increasing lean body mass, and are the typical prescription for most overweight patients, compliance with lower-calorie diets and/or exercise regimens is challenging for most. According to NIH Guidelines on obesity treatment, pharmacotherapy may provide a beneficial adjunct to dietary, activity, and behavioral modifications in selected individuals, including: those with BMI 30 kg/m2 (obese) and no concomitant risk factors, or those with BMI 27 kg/m2 (overweight) and comorbidities such as hypertension, dyslipidemia, type 2 diabetes, coronary artery disease, and sleep apnea. Per NIH recommendations, the initial goal of weight loss therapy is an approximately 10% reduction in body weight from baseline, accomplished within a time frame of 6 months on treatment. The growing view of obesity as a chronic disease that requires targeted treatment has spurred industry-wide efforts to develop novel therapeutics. During the 60-year history of obesity drug marketing, one of the biggest challenges has been to develop a drug that is: (1) effective in promoting durable weight loss, (2) safe for long-term use, and (3) non habit-forming. Until 1996, all drugs approved for weight-loss indications by the FDA were labeled for short-term use only (a few weeks). This was partly because obesity was not considered a chronic condition, so the drugs were viewed as short-term jumpstarts to longer programs of diet and exercise. Also, most of the early drugs were amphetamine derivatives with significant abuse potential. As obesity became more prevalent during the 1980s, the FDA began to recognize it as a chronic condition requiring longer-term treatment. In 1996, the agency issued a draft
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guidance requiring extensive safety data for one year or longer for new obesity drug applications. Long-term safety is an especially crucial issue for contemporary obesity NDAs since, despite the more stringent 1996 draft guidance, three out of the four obesity drugs subsequently approved were found to be associated with serious safety issues post approval and ultimately withdrawn from one or more major markets. Poor Safety Record of Obesity Drugs
Drug Desoxyn (methamphetamine) Preludin (phenmetrazine) phentermine Tenuate (diethylpropion) Bontril (phendimetrazine) Didrex (benzphetamine) Mazindol Fenfluramine Redux (dexfenfluramine) Meridia (sibutramine) Xenical (orlistat) Acomplia (rimonabant)
Source: Cowen and Company
Year Approved Comment Approved Duration Of Use 1947 Short-term Black box warning for abuse potential 1956 Short-term Banned in Sweden and rarely prescribed elsewhere due to abuse 1959 Short-term Label warns against combination use 1959 Short-term Label contraindicates combination use 1959 Short-term Rarely prescribed due to abuse potential 1960 Short-term Label warns against combination use 1973 Short-term 1973 Short-term Withdrawn in 1997 on valvulopathy risk 1996 Long-term Withdrawn in 1997 on valvulopathy risk 1997 Long-term Withdrawn in 2010 on CV risk 1999 Long-term 2006 (EU) Long-term Withdrawn from EU in 2009 on suicidality risk
In 2007, the FDA revised the weight-loss drug draft guidance. The guidance now requires Phase III placebo-controlled trials, with approximately 1,500 patients on placebo and 3,000 patients on drug for a period of at least one year to assess safety. The 2007 guidance defined two efficacy endpoints, at least one of which should be met for a new drug candidate to be considered effective: (1) mean efficacy (statistically significant difference in mean weight loss of at least 5% between therapy and placebo groups), and (2) categorical efficacy (the proportion of subjects losing 5% of body weight in the active drug group should be greater than 35%, and at least double the proportion in the placebo group, with the difference between groups being statistically significant). Until recently, only a handful of FDA-approved prescription products were marketed, including generic phentermine and Roche/GlaxoSmithKlines Xenical (orlistat). Our clinical consultants use these older medications in about 50% of their obesity patients, primarily because they are only modestly efficacious (resulting in loss of 8-10 pounds, or approximately 5% of baseline body weight) while also associated with poor safety and tolerability profiles. Because phentermine and Xenical have questionable benefit/risk profiles and are not generally reimbursed by payors, only 6MM of 160MM obese patients worldwide are treated. Of those, only 50% are thought to be compliant with therapy. Although bariatric surgery and other invasive procedures have gained wider acceptance and can result in significant weight loss, these options remain reserved for those patients at the severe end of the obesity spectrum. Hence, the overwhelming majority of obese patients are inadequately treated for their
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condition. In this context, and with a difficult market history of weight-loss drugs stymied by major safety issues, the FDA approved BELVIQ and Qsymia in 2012, after previously rejecting both. Current thinking on obesity reflects understanding that the affected population is not necessarily homogenous. This perspective has been shared in a recent consensus report of the Obesity Drugs Outcome Measures Dialogue Group, composed of academic and clinical key opinion leaders, health advocacy leaders, industry representatives, and government (FDA, CDC, NIH) observers. Beyond characterization based primarily on size (BMI), there is recognition of an obesity spectrum, accounting for variations in health effects, functional limitations, and psychosocial impairment. Patient stratification may be considered in three groups: Obese and Well, Obese with Risk Factors, and Obese and Sick. Obese-Well individuals have no related risks and no significant impairments. The Obese-Sick have obesityrelated comorbidities, with impairments of function or daily feeling. In the middle are those who have no current comorbidities but carry specific risk factors for health and symptomatic effects. Considering disease severity across a spectrum of obesity may help to clarify patient needs, therapeutic goals, and acceptable risk levelsstrategic factors which ultimately impact treatment decisions.
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EQUATE (OB-301)*
Number of patients Duration 756 28 weeks Qsymia 7.5/46 mg, Qsymia 15/92 mg, Topiramate 46 mg, Topiramate 92 mg, Phentermine 7.5 mg, Phentermine 15 mg, Placebo BMI 30-45; baseline weight 223 pounds 36 46 79% Caucasian (79%)
EQUIP (OB-302)
1,267 56 weeks Qsymia 3.75/23 mg, Qsymia 15/92 mg, Placebo
CONQUER (OB-303)
2,487 56 weeks Qsymia 7.5/46 mg, Qsymia 15/92 mg, Placebo
SEQUEL (OB-305)*
675 108 weeks (extension study) Qsymia 7.5/46 mg, Qsymia 15/92 mg, Placebo
Treatment groups
Patient demographics (BMI, kg/m2) Mean BMI, kg/m2 Average age (years) Female Proportion Ethnicity Adjunct lifestyle/behavior modification program Co-primary endpoints Data Announced
BMI 27-45 and 2 comorbidities BMI 27-45 and 2 comorbidities BMI 35, with no upper limit; (HTN, dyslipidemia, diabetes, (HTN, dyslipidemia, diabetes, baseline weight 256 pounds abdominal obesity; baseline weight abdominal obesity; baseline weight 225 pounds 227 pounds 42 37 36 43 51 51-52 83% 70% 65%-70% Caucasian (80%) Caucasian (70%) Caucasian (83%-87%) African-American (16%-18%) African-American (11%-12%) African-American (11%-15%)
Standardized counseling on nutrition and exercise based on the LEARN weight management program, with monthly progress discussion 1) mean change in body weight from baseline 2) proportion of patients 5% weight loss December 2008 September 2009 September 2009 September 2010
Qsymia Low-Dose: 3.75/23mg (phentermine/topiramate) ; Qsymia Mid-Dose: 7.5/46mg; Qsymia High-Dose: 15/92mg
Source: Cowen and Company, *EQUATE and SEQUEL were not pivotal studies
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Q s y m ia 1 5 m g p h e n /9 2 m g to p i (IT T )
E Q U A TE (O B -3 0 1 ) Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 7 5 6 ) E Q U IP (O B -3 0 2 ) Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 1 , 2 6 7 ) S E Q U E L (O B -3 0 5 )Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 2 , 4 8 7 ) C O N Q U E R (O B -3 0 3 ) Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 6 7 5 ) 9.2% 1.7% 7.5% 66.0% 15.5% 50.5% 38.8% 6.8%
10.9%
1.6%
9.3%
66.7%
17.3%
49.4%
47.2%
7.4%
10.5%
1.8%
8.7%
79.3%
30.0%
49.3%
53.9%
11.5%
10.4%
1.8%
8.6%
70.0%
21.0%
49.0%
48.0%
7.0%
Q s y m ia 7 .5 m g p h e n /4 6 m g to p i (IT T )
E Q U A TE (O B -3 0 1 )Q s y m ia 7 . 5 m g p h e n / 4 6 m g to p ; (n = 7 5 6 ) S E Q U E L (O B -3 0 5 )Q s y m ia 7 . 5 m g p h e n / 4 6 m g to p ; (n = 2 , 4 8 7 ) C O N Q U E R (O B -3 0 3 ) Q s y m ia 7 . 5 m g p h e n / 4 6 m g to p ; (n = 6 7 5 ) 8.5% 1.7% 6.8% 62.1% 15.5% 46.6% 40.8% 6.8%
9.3%
1.8%
7.5%
75.2%
30.0%
45.2%
50.3%
11.5%
8.4%
1.8%
6.6%
62.0%
21.0%
41.0%
37.0%
7.0%
Q s y m ia 1 5 m g p h e n /9 2 m g to p i (c o m p le te r s )
E Q U IP (O B -3 0 2 ) Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 1 , 2 6 7 ) S E Q U E L (O B -3 0 5 )Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 2 , 4 8 7 ) C O N Q U E R (O B -3 0 3 ) Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 6 7 5 ) 14.4% 2.1% 12.2% 83.5% 25.5% 58.0% 67.7% 13.0%
10.7%
2.2%
8.5%
79.3%
30.0%
49.3%
53.9%
11.5%
12.4%
1.6%
10.8%
85.1%
26.2%
58.9%
64.3%
9.7%
7 .5 m g p h e n /4 6 m g to p i (c o m p le te r s )
S E Q U E L (O B -3 0 5 )Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 2 , 4 8 7 ) C O N Q U E R (O B -3 0 3 ) Q s y m ia 1 5 m g p h e n / 9 2 m g to p i; (n = 6 7 5 ) 9.3% 2.2% 7.1% 75.2% 30.0% 45.2% 50.3% 11.5%
9.6%
1.6%
8.0%
74.6%
26.2%
48.4%
49.1%
9.7%
Q s ym ia L o w - D o s e : 3 .7 5 / 2 3 m g ( p h e n t e r m in e / t o p ir a m a t e ) ; Q s ym ia M id - D o s e : 7 .5 / 4 6 m g ; Q s ym ia T o p - D o s e : 15 / 9 2 m g
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This seven-arm study was conducted to demonstrate the contributions of each drug component to the Qsymia weight loss effect, and to confirm the efficacy of Qsymia over phentermine and topiramate alone. The co-primary endpoints for the trial were mean weight loss from baseline and the proportion of subjects achieving weight loss of 5% or more of body weight at 28 weeks. In order for efficacy of a Qsymia dose to be determined, each of three pairwise comparisons, Qsymia dose vs. each single agent and Qsymia dose vs. placebo, needed to reach the 5% significance level for either co-primary endpoint. EQUATE Trial Schematic
Results from EQUATE were reported in December 2008. The trial demonstrated statistically significant weight loss with both Mid-dose and Top-dose Qsymia compared to placebo. Also,
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the contributions of phentermine and topiramate individually to Qsymia efficacy were demonstrated. Furthermore, the efficacy of Qsymia over these components was shown. 1) Qsymia mid-dose vs. placebo: Patients treated with mid-dose Qsymia had mean weight loss of 8.5% compared to 1.7% for those treated with placebo. This difference was statistically significant (p<0.0001). 62% of the Qsymia mid-dose group had 5% weight loss compared with 15.5% of the placebo group. This difference was also statistically significant (p<0.0001). For both co-primary endpoints, the benchmark established by the factorial trial design was met to show efficacy of the Qsymia mid-dose over placebo. 2) Qsymia mid-dose vs. phentermine 7.5 mg: Patients treated with mid-dose Qsymia had mean weight loss of 8.5%, while those treated with phentermine 7.5 mg lost an average 5.5% of body weight. This difference was statistically significant (p=0.0003), meeting the significance level set in the factorial design to determine efficacy of the Qsymia mid-dose over phentermine alone. 3) Qsymia mid-dose vs. topiramate 46 mg: Patients treated with mid-dose Qsymia had mean weight loss of 8.5%, while those treated with topiramate 46 mg had average loss of 5.1%. This difference was statistically significant (p<0.0001), also meeting the significance level set in the factorial design to determine efficacy of the Qsymia mid-dose over topiramate alone. 4) Qsymia top-dose vs. placebo: Patients treated with top-dose Qsymia had mean weight loss of 9.2% compared to 1.7% for those treated with placebo. This difference was statistically significant (p<0.0001). 66% of the Qsymia top-dose group had 5% weight loss compared with 15.5% of the placebo group, which was also a statistically significant (p<0.0001) difference. For both co-primary endpoints, the benchmark established by the factorial trial design was met to show efficacy of the Qsymia top-dose over placebo. 5) Qsymia top-dose vs. phentermine 15 mg: Patients treated with top-dose Qsymia had mean weight loss of 9.2%, while those treated with phentermine 15 mg lost 6.1% of body weight on average. This difference was statistically significant (p=0.0001), meeting the significance level set in the factorial design to determine efficacy of the Qsymia top-dose over phentermine alone. 6) Qsymia top-dose vs. topiramate 92 mg: Patients treated with top-dose Qsymia had mean weight loss of 9.2%, while those treated with topiramate 92 mg had average loss of 6.4%. This difference was statistically significant (p=0.0009), and again met the significance level set in the factorial design to determine efficacy of the Qsymia top-dose over topiramate alone.
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Safety: Both doses were well tolerated. The most common adverse events were: paresthesia (mid-dose: 15%, top-dose: 20%, placebo: 3%), dry mouth (mid-dose: 12%, top-dose: 18%, placebo: 0%), constipation (mid-dose: 6%, top-dose: 11%, placebo: 6%), and altered taste (mid-dose: 8%, top-dose: 15%, placebo: 0%). There were no significant differences in depression and altered mood for either Qsymia dose group compared with placebo (mid-dose: 0.9%, top-dose: 1.9%, placebo: 1.8%).
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Number of Patients Average BMI, Kg/m Average Weight Average Age, years Female Proportion Mean Systolic BP, mm Hg Mean Diastolic BP, mm Hg
2
The co-primary endpoints for the trial were mean weight loss from baseline and the proportion of subjects achieving weight loss 5% of baseline body weight at 56 weeks. The trial successfully met its co-primary endpoints at 56 weeks: 1) % average weight loss: Patients treated with Qsymia 15/92 mg had an average weight loss of 10.9%, compared with 1.6% in the placebo group, for a placebo-adjusted average weight loss of 9.3%. This result was statistically significant (p<0.0001) and met FDAs efficacy benchmark of at least a 5% difference in average weight loss between therapy and placebo. For the low-dose Qsymia 3.75/23 mg group, patients had mean weight loss of 5.1% and placebo-adjusted loss of 3.5%. This result was also statistically significant (p<0.0001) but did not meet FDAs efficacy benchmark for mean weight loss. 2) % of patients losing at least 5% of their weight: 66.7% of patients in the Qsymia 15/92 mg group lost at least 5% of baseline body weight, compared to 17.3% in the placebo group. This improvement over placebo was statistically significant (p<0.0001), meeting the categorical weight loss threshold specified in FDAs guidance. In the low-dose Qsymia group, 44.9% achieved 5% weight loss. This result, which was statistically significant (p<0.0001) compared to placebo, also met the FDA benchmark for categorical weight loss efficacy. Analysis of completers demonstrated placebo-adjusted average weight losses of 12.3% and 4.6% in the Qsymia top-dose and low-dose groups, respectively, with these differences from placebo being statistically significant (p<0.0001). 83.5% and 59% of completers in the Qsymia top-dose and low-dose groups, respectively, lost 5% of body weight, compared with 25.5% of placebo patients. In EQUIP, the lower limit for baseline BMI was 35 kg/m2, and there was no upper limit. The BMI spectrum ranged from 35 kg/m2 to 79 kg/m2 in the trial. The ITT-LOCF analysis was repeated with categorization of patients by BMI to evaluate any influence of baseline BMI on the efficacy results. There was noted to be no significant interaction (p=0.8056) between BMI category and efficacy result, meaning that weight-loss results did not vary significantly by baseline BMI.
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Additionally, weight loss results with Qsymia were associated with general improvements, compared with placebo, in anthropometric and cardiometabolic parameters, such as waist circumference, blood pressure, triglycerides, cholesterol, and fasting glucose. The Qsymia topdose group had statistically significant improvements, while the Qsymia low-dose group had numerically greater, but not always statistically significant, changes in these parameters compared with the placebo group. Blood pressure and heart rate: Mean systolic and diastolic blood pressures were decreased from baseline at week 56 in both Qsymia dose groups, while increased in placebo patients. Mean SBP was reduced by 1.8 mm Hg and 2.9 mm Hg in the Qsymia low-dose and top-dose groups, respectively, compared to an increase of 0.9 mm Hg in the placebo group. Mean DBP was lowered by 0.1 mm Hg and 1.5 mm Hg in the Qsymia low-dose and top-dose groups, respectively, compared to an elevation of 0.4 mm Hg in the placebo group. Heart rate was elevated in the Qsymia top-dose cohort (+1.2 bpm) at 56 weeks, but decreased in the Qsymia low-dose (-0.3 bpm) and placebo (-0.2 bpm) groups. EQUIP: Selected Secondary Endpoints
Waist circumference (cm) Systolic blood pressure (mm Hg) Diastolic blood pressure (mm Hg) Change in heart rate (bpm) Total cholesterol (%) Triglycerides (%) Fasting glucose (mg/dL)
Source: Cowen and Company, Vivus, FDA briefing document
Safety: The most common adverse events included paresthesia, dry mouth, constipation, dysgeusia, and insomnia, none of which caused study discontinuation in more than 1% of
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patients. Assessment of depressive symptoms according to standardized rating scales showed improvement in symptoms over time in all groups, with no significant differences among the groups. Qsymia patients did not have increased suicidality compared with placebo patients. The rates of serious AEs were the same, 2.5%, for all groups. Mood-related AEs, such as depression, anxiety, and irritability, as well as cognition-related AEs, such as disturbance in attention, occurred more frequently in the Qsymia top-dose group. Discontinuations related to AEs were also more common in the Qsymia top-dose group (16%), compared with the lowdose (11%) or placebo (8%) groups. Teratogenicity: Out of 15 pregnancies in women treated with Qsymia, there were 3 spontaneous abortions, 3 elective abortions, and 9 healthy live births. There were no birth defects or congenital malformations in these infants.
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2,487 37 227 lbs 51 70% 128 81 52% 162.5 36% 5.9 16% 51%
The co-primary endpoints of the study were mean percent weight loss and the proportion of subjects achieving weight loss of 5% or more at 56 weeks. The trial successfully met its co-primary endpoints at 56 weeks: 1) % average weight loss: Patients treated with Qsymia 15/92 mg had an average weight loss of 9.8%, compared with 1.2% in the placebo group, for a placebo-adjusted average weight loss of 8.6%. This result was statistically significant (p<0.0001) and met FDAs efficacy benchmark of at least a 5% difference in average weight loss between therapy and placebo. For the mid-dose Qsymia 7.5/46 mg group, patients had mean weight loss of 7.8% and
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placebo-adjusted loss of 6.6%, which was also statistically significant (p<0.0001) and met FDAs efficacy benchmark for mean weight loss. 2) % of patients losing at least 5% of their weight: 70% of patients in the Qsymia 15/92 mg group lost at least 5% of baseline body weight, compared to 21% in the placebo group. This improvement over placebo was statistically significant (p<0.0001), meeting the categorical weight loss threshold specified in FDAs guidance. In the Qsymia 7.5/46 mg group, 62% achieved 5% weight loss. This result, which was also statistically significant (p<0.0001) compared with placebo, also met the FDA benchmark for categorical weight loss efficacy. Analysis of completers demonstrated placebo-adjusted average weight losses of 10.8% and 8% in the Qsymia top-dose and mid-dose groups, respectively, with these differences from placebo being statistically significant (p<0.0001). 85% and 75% of completers in the Qsymia top-dose and mid-dose groups, respectively, lost 5% of body weight, compared with 26% of placebo patients. CONQUER: Efficacy Data
Key Endpoints n (ITT-LOCF) Mean Weight Loss (%) (ITT-LOCF) 5% weight loss (ITT-LOCF) 10% weight loss (ITT-LOCF) n (completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate CONQUER (OB-303) (n=2487); (56 weeks) Qsymia midQsymia topPlacebo p-value dose dose (n=488) 7.8% 62.0% 37.0% (n=338) 9.6% 74.6% 49.1% 69% (n=981) 9.8% 70.0% 48.0% (n=625) 12.4% 85.1% 64.3% 64% (n=979) 1.2% 21.0% 7.0% (n=557) 1.6% 26.2% 9.7% 57% p<0.0001 p<0.0001 p<0.0001
Additionally, as in EQUIP, weight loss results with Qsymia were associated with significant improvements in anthropometric and cardiometabolic parameters, such as waist circumference, blood pressure, triglycerides, and total cholesterol. In hypertensive patients, there were greater reductions in systolic blood pressure with Qsymia compared with placebo (top-dose, -9 mm Hg (p<0.0001) and mid-dose, -7 mm Hg (p=0.0475) vs. placebo, -5 mm Hg). Also, more patients in the Qsymia top- and mid-dose groups, 11% and 15%, respectively, than 5% in the placebo group were able to discontinue anti-hypertension medications. For patients with type 2 diabetes, having mean baseline HbA1c level of 6.8% across all groups, there were statistically significant reductions in HbA1c from baseline in the two Qsymia groups (-0.4% in each group) versus placebo (-0.1%). More patients treated with placebo (15%) required an increase in diabetes medications than did Qsymia patients (4% in each of the two dose groups). Blood pressure and heart rate: Mean systolic and diastolic blood pressures were decreased from baseline at week 56 to a greater extent in both Qsymia dose groups than in placebo
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patients. Mean SBP was reduced by 4.7 mm Hg and 5.6 mm Hg in the Qsymia mid-dose and top-dose groups, respectively, compared to a decrease of 2.4 mm Hg in the placebo group. Mean DBP was lower by 3.4 mm Hg and 3.8 mm Hg in the Qsymia mid-dose and top-dose groups, respectively, compared to a reduction of 2.7 mm Hg in the placebo group. Heart rate was elevated in the Qsymia top-dose cohort (+1.7 bpm) at 56 weeks, and relatively unchanged in the Qsymia mid-dose (+0.1 bpm) and placebo (-0.1 bpm) groups. CONQUER: Selected Secondary Endpoints
Waist circumference (cm) Systolic blood pressure (mm Hg) Diastolic blood pressure (mm Hg) Change in heart rate (bpm) Total cholesterol (%) Triglycerides (%) Fasting glucose (mmol/L) Glycated hemoglobin (%) Change in HbA1c (%) in 388 patients (16%) with baseline T2D (baseline HbA1c 6.8%, all groups) Fasting insulin (pmol/L) HOMA-IR hsCRP (mg/L)
Source: Cowen and Company, Vivus, FDA briefing document
Qsymia middose -7.6 -4.7 -3.4 0.1 -4.9 -8.6 -0.01 0 -0.4 -24 -0.93 -2.49
p-value <0.0001 0.0008 0.1281 0.92 0.0345 <0.0001 0.0047 <0.0001 0.0288 0.0004 0.0007 <0.0001
Qsymia topdose -9.2 -5.6 -3.8 +1.7 -6.3 -10.6 -0.07 -0.1 -0.4 -27.6 -1.07 -2.49
p-value <0.0001 <0.0001 0.0031 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 0.0043 <0.0001 <0.0001 <0.0001
Placebo -2.4 -2.4 -2.7 -0.1 -3.3 4.7 0.13 0.1 -0.1 5.1 0.46 -0.79
Safety: As seen in EQUIP, the most common adverse events included paresthesia, dry mouth, constipation, dysgeusia, and insomnia. Psychiatric AEs, such as depression, anxiety, and irritability, as well as cognitive AEs, such as disturbance in attention, occurred more frequently in the Qsymia top-dose group. These AEs were noted earlier in treatment and generally resolved with discontinuation of therapy. Assessment of depressive symptoms by standardized rating scales showed no significant differences among the groups. Qsymia patients did not have increased suicidality compared with placebo patients. The rates of serious AEs were similar across groups (5% Qsymia top-dose, 3% Qsymia mid-dose, 4% placebo). Discontinuations related to AEs were more common in the Qsymia top-dose group (19%), compared with the mid-dose (12%) or placebo (9%) groups.
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Number of Patients Average BMI, Kg/m Average Weight Average Age, years Female Proportion Mean Systolic BP, mm Hg Mean Diastolic BP, mm Hg Proportion with HTN Mean Triglycerides, mg/dL Proportion with dyslipidemia Mean HbA1c, % Proportion with Type 2 diabetes
Source: Cowen and Company, Vivus, FDA briefing document
2
The co-primary endpoints of the SEQUEL study, retained from CONQUER, were mean percentage weight loss and the proportion of subjects achieving weight loss of 5% or more from baseline (week 0 of CONQUER) to 108 weeks. The trial successfully met its co-primary endpoints at 108 weeks: 1) % average weight loss: Patients treated with Qsymia 15/92 mg had an average weight loss of 10.5%, compared with 1.8% in the placebo group, for a placebo-adjusted average weight loss of 8.7%. This improvement was statistically significant (p<0.0001). For the middose Qsymia 7.5/46 mg group, patients had mean weight loss of 9.3% and placebo-adjusted loss of 7.5%, which was also statistically significant (p<0.0001). 2) % of patients losing at least 5% of their weight: 79% of patients in the Qsymia 15/92 mg group lost at least 5% of baseline body weight, compared to 30% in the placebo group. This improvement over placebo was statistically significant (p<0.0001). In the Qsymia 7.5/46 mg group, 75% achieved 5% weight loss. This result was also statistically significant (p<0.0001). Analysis of completers demonstrated placebo-adjusted average weight losses of 8.5% and 7% in the Qsymia top-dose and mid-dose groups, respectively, with these differences from placebo again being statistically significant (p<0.0001).
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p<0.0001
In SEQUEL, weight loss results with Qsymia continued to be associated with significant improvements in anthropometric and cardiometabolic parameters, such as waist circumference, triglycerides, and fasting insulin. For patients with type 2 diabetes, having mean baseline HbA1c levels of 6.9% in the placebo and Qsymia top-dose groups and 7.3% in the mid-dose group, there were reductions in HbA1c levels from baseline of 0.2% and 0.4% in the two Qsymia groups, respectively, versus the placebo group (-0.04%), in which HbA1c was essentially unchanged. Blood pressure and heart rate: At week 108, mean systolic and diastolic BPs were decreased from baseline by 3-5 mm Hg across all groups. The degree of BP reduction did not differ significantly among the treatment arms. However, more Qsymia patients (16% top-dose and 13% mid-dose) decreased use of anti-hypertensive medications compared with placebo patients (8%). Heart rate was elevated in the Qsymia top-dose group (+1.7 bpm) at 108 weeks to a slightly greater extent than in the Qsymia mid-dose (+1.3 bpm) and placebo (+0.4 bpm) groups. There were no reported AEs associated with heart rate elevations, and no clinically significant effects resulting from the elevations were observed. SEQUEL: Selected Secondary Endpoints
Waist circumference (cm) Systolic blood pressure (mm Hg) Diastolic blood pressure (mm Hg) Change in heart rate (bpm) Fasting insulin (lIU/mL) Triglycerides (%) Change in HbA1c (%) Change in HbA1c (%) in 145 patients (22%) with baseline T2D (baseline HbA1c 6.9-7.3%)
Source: Cowen and Company, Vivus, FDA briefing document
Qsymia middose -9.8 -4.7 -3.7 +1.3 -5.3 -12.5 0.01 -0.4
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In April 2011, Vivus presented additional data from SEQUEL at the 60th Annual Scientific Meeting of the American College of Cardiology (ACC). The ACC poster highlighted SEQUEL data in two subgroups of patients, those with dyslipidemia and hypertension: 1) Hypertensive patients (SBP 140-160 mmHg or DBP 90-100 mmHg in non-diabetic patients, and SBP 130-160 mmHg or DBP 85-100mmHg in diabetic patients) across all groups had BP reductions over 108 weeks. Mean SBP decreased by 8.6 mm Hg and 6.9 mm Hg in the Qsymia top-dose and mid-dose groups, respectively, with reduction of 6.7 mm Hg in placebo patients. Mean DBP decreased by 5.8 mm Hg, 4.8 mm Hg, and 5.7 mm Hg in the Qsymia topdose, Qsymia mid-dose, and placebo groups, respectively. BP reductions in the Qsymia group were not statistically significant compared to those in the placebo group. 2) Patients with dyslipidemia (triglycerides 200-400mg/dL or patients taking 2 lipid-lowering agents) on Qsymia mid-dose and top-dose had reductions in triglyceride levels of 25.9% and 26.3%, respectively, compared with a 14.3% reduction in those on placebo (p=0.055 and p=0.015, respectively). 3) Patients with dyslipidemia on Qsymia mid-dose and top-Dose had improvements in HDL cholesterol levels of +11.4% and +16.7%, respectively, compared with a +9.1% increase in placebo patients (NS and p<0.015, respectively). Safety: The AEs occurring during the SEQUEL second year extension were similar to those observed in CONQUER, but the incidence of individual AEs was lower in the second year compared with the first year. The most common AEs included paresthesia, dry mouth, constipation, dysgeusia, and upper respiratory tract infection. Rates of depression-related AEs were comparable in placebo and Qsymia top-dose patients (8% each) and lower in the middose group (4%). Qsymia patients did not have increased suicidality compared with placebo patients. The rates of serious AEs were similar across groups (8% Qsymia top-dose, 6% Qsymia mid-dose, 6% placebo). Discontinuations related to AEs by week 108 were also similar across the groups: Qsymia top-dose group (4.4%), mid-dose (4.5%), and placebo (3%). Teratogenicity: During the 108 weeks of CONQUER and SEQUEL, there were 2 pregnancies, with one pregnancy carried to term by a patient treated with Qsymia 15/92 mg. The infant was born healthy, with no congenital malformations observed.
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Weeks 56-108; n(%) 12 (4.1) 10 (3.4) 4 (1.4) 45 (15.3) 26 (8.8) 3 (1.0) 28 (9.5) 12 (4.1) 11 (3.7) 11 (3.7) 15 (5.1) 1 (0.3) 4 (1.4) 10 (3.4) 4 (1.4) 14 (4.7) 16 (5.4) 19 (6.4) 18 (6.1) 9 (3.1) 7 (3.1) 0 (0.0) 1 (0.4) 42 (18.5) 26 (11.5) 0 (0.0) 18 (7.9) 6 (2.6) 8 (3.5) 3 (1.3) 7 (3.1) 2 (0.9) 4 (1.8) 7 (3.1) 2 (0.9) 4 (1.8) 14 (6.2) 8 (3.5) 13 (5.7) 6 (2.6)
Qsymia Safety
Across the Qsymia clinical trial program, AEs generally occurred as expected and were consistent with side effects of the individual component drugs. In the 1-year cohort of patients, the most common AEs across Qsymia mid-dose and top-dose patients were paresthesias, dry mouth, and constipation. Discontinuations resulting from treatment-emergent AEs were more frequent in the Qsymia groups, 17% (top-dose) and 12% (mid-dose), compared with placebo (8%). The rate of serious AEs was similar across the groups: 4% (top-dose), 3% (mid-dose), 3% (placebo). There were no serious psychiatric or cognitive AEs with Qsymia treatment. AE profiles in the second year were consistent with those during the first year, but with overall lower rates. There were no new or unexpected AEs observed during the second year.
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Qsymia Topdose (n=1,580) 19.9% 10.6% 8.6% 9.4% 3.7% 3.5% 9.4% 4.3% 4.1% 16.1% 19.1% 7.2% 5.6% 2.8% 2.6% 2.2% 5.9% 3.7% 2.0% 0.9% 1.7%
Both the Initial Ad Com Panel and the FDA Rejected Qsymia in 2010...
On July 15, 2010, the FDA's Endocrinologic and Metabolic Drugs Advisory Committee voted 10-6 against recommending Qsymia for approval. The advisory committee concluded that Qsymias one-year data did not adequately represent the drug's long-term use, and that Qsymia had not been sufficiently examined in patients with cardiovascular disease. The FDA and the advisory committee focused almost exclusively on Qsymia's safety profile, particularly cardiovascular risk, teratogenicity, cognitive AEs, neuropsychiatric AEs, and metabolic acidosis. Vivus presented data adequate to assuage the panel on the psychiatric, cognitive, and metabolic acidosis issues, but the cardiovascular data presented were insufficient to judge CV outcomes and more teratogenicity data were deemed to be needed. On October 28, 2010, Vivus announced receipt of a Complete Response Letter from the FDA. The CRL requested: (1) a comprehensive assessment of topiramates and Qsymias
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teratogenic potential, (2) evidence that the elevation in heart rate observed in Qsymias trials does not increase the risk for MACE, and (3) the results of the two-year SEQUEL trial. At a January 2011 meeting with the FDA, Vivus was asked to perform an analysis of existing healthcare databases (the FORTRESS study) to determine the incidence of oral clefts in offspring of women treated with topiramate for migraine prophylaxis.
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RRS Analysis baseline mean RRS mean change RRS (SD) least squares mean % change RRS RRS Analysis baseline mean RRS mean change RRS (SD) least squares mean % change RRS
*p<0.05 vs baseline; p<0.05 vs placebo
Women (n=2,711) mid-dose Qnexa high-dose Qnexa n=341 n=1,084 3.06 2.51 -0.65* (1.86) -13.64*
,
placebo n=1,093 2.65 -0.13 (1.76) 3.97* placebo n=372 6.70 -0.20 (3.00) 6.06*
Men (n=941) mid-dose Qnexa high-dose Qnexa n=147 n=383 7.67 6.54 -1.15* (3.01) -5.40*, -1.23* (3.24) -11.78*,
While the 2010 panel members were satisfied with Qsymia's efficacy profile, they were concerned about the lack of CV outcomes data and the relatively short safety database (12 months) available for a drug that would be used by high CV risk patients for many years. Even with the addition of the two-year SEQUEL data, Qsymias dataset was considered lacking in long-term safety data for patients with elevated CV risk.
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Systolic blood pressure, mm Hg Mean change Difference from placebo (mmHg) Diastolic blood pressure, mm Hg Mean change Difference from placebo (mmHg) Heart rate, bpm Mean change Difference from placebo (bpm)
-3.3 -1.20
-5.2 -3.10
-5.2 -3.10
-2.1
-0.9 1.00
-3.3 -1.40
-2.9 -1.00
-1.9
+1.3 +1.30
+0.6 +0.60
+1.6 +1.60
0.0
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February 2012: FDA AdCom Recommends Approval With Post-Approval CVOT Requirement
At the February 2012 FDA advisory committee, a number of panel members expressed serious concerns about Qsymias CV safety profile. However, given the lack of available treatment options and the impact of obesity and its comorbidities in patients, the panel recommended that a post-approval CVOT would be sufficient to rule out CV risk, voting 20-2 in favor of Qsymias approval.
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EU approval pushed back a minimum of 2-3 years: Management previously indicated that the most likely scenario would involve proceeding with the CVOT required for the US, and reengaging EMA with discussions about possibly re-filing based on interim CVOT data, hoping for an outcome similar to the Contrave situation (Orexigen) with the LIGHT study in the US. In September 2013, Vivus announced the submission of a request to EMA for scientific advice regarding use of a pre-specified interim analysis of AQCLAIM in support of the Qsiva MAA resubmission. The company indicated that the anticipated 1Q14 date for initiation of enrollment in AQCLAIM has been chosen to accommodate advice from EMA.
Our Consultants Believe That JNJs Shank Patent Could Be an IssueBut a Settlement Is the Most Likely Outcome
J&J owns a method-of-use patent for Topamax (topiramate) (U.S. patent #6,071,537, the Shank patent), which makes broad claims regarding treatment of obesity comprising the use of topiramate. It also specifically claims therapeutically effective doses of topiramate from 50 to 400mg. The patent claiming composition-of-matter of Topamax expired in September 2008 and thus does not present a commercialization barrier for Qsymia. According to our consultants, the Qsymia Najarian patent estate could potentially be seen as infringing on the J&J Shank patent, which expires in 2017. Given that J&J is not marketing topiramate for the treatment of obesity, the company is unlikely to be able to claim irreparable harm. We see a royalty settlement between Vivus and J&J as the most likely eventual outcome.
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Contrave: Clinical Data Summary COR: Contraves Successful Phase III Program
In July 2009, Orexigen successfully completed four Phase III trials with Contrave, a development program termed COR (Contrave Obesity Research). This program met the requirements detailed in the FDAs weight management guidance for one-year studies, adequate patient exposure, efficacy endpoints, and appropriate target populations consisting of obese and overweight patients with comorbidities, including type 2 diabetes. Four 56-week trials evaluated a 360 mg daily dose of bupropion SR paired with 16 mg or 32 mg naltrexone SR doses. The co-primary endpoints of each trial were mean percentage change in body weight from baseline, and proportion of subjects with categorical 5% weight loss from baseline. Secondary endpoints included proportion of subjects with categorical 10% weight loss, weight-related cardiometabolic parameters, and impact of weight on QOL. The modified intent-to-treat (mITT) population, comprised by all randomized patients with at least one postbaseline measurement while on study drug, was analyzed for primary efficacy. Contraves Phase III Program: COR (Contrave Obesity Research)
COR-BMOD (formerly NB-302)
Number of patients Duration Treatment groups Patient demographics Comorbidities for inclusion Mean baseline weight, lbs Mean BMI, kg/m
2
793
1 year Contrave32, Placebo
BMI 30-45 kg/m2 or BMI 27-45 kg/m2 with at least 1 comorbidity Required controlled hypertension, dyslipidemia, or both 220 36-37 36 44 85% Caucasian (75%) African-American (19%) 36 44 85% Caucasian (84%) African-American (14%)
BMI 27-45 kg/m2 Type 2 diabetes 232 36 54 56% Caucasian (79%) African-American (16%)
46 90%
Caucasian (70%) African-American (24%) Intensive 90 min group meetings weekly for 16 weeks, then every other week for 12 weeks, then monthly (28 total sessions)
Instruction on diet and advice on lifestyle/behavior modification, including exercise instruction, at baseline and weeks 12/24/36/48 1) mean weight loss from baseline 2) proportion of patients > 5% weight loss
January 2009
July 2009
July 2009
July 2009
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COR-BMOD: First Phase III Trial Meets One of Two FDA Efficacy Benchmarks
In January 2009, Orexigen reported data from the first of four pivotal trials of Contrave, the NB302 (COR-BMOD) study. In this 56-week study, both Contrave treatment and placebo were combined with intensive group behavior modification (BMOD), a program of diet, exercise, and behavior therapy. Patients were randomized 1:3 to placebo or treatment with 32 mg sustainedrelease (SR) naltrexone + 360 mg SR bupropion (Contrave32). The study included a 3-week dose escalation, starting with one-quarter of the full dose, which was increased weekly until the full dose was reached by week 4. Eligibility criteria in the trial included: age 18-65 years, and BMI 30-45 kg/m2 or 27-45 kg/m2 with controlled hypertension and/or dyslipidemia. Exclusion criteria included diabetes mellitus as well as current smoking, or tobacco/nicotine use within 6 months before screening. The intensive behavior modification program was delivered to groups of 10-20 participants by registered dieticians, behavioral psychologists, or exercise specialists. Group meetings of 90 minutes, including a weigh-in, occurred weekly for 16 weeks, then every other week for 12 weeks, and then monthly, for a total of 28 sessions. Patients were prescribed a diet of 1,200 kcal/day to 2,000 kcal/day, depending on body weight, and were encouraged to gradually increase to 180 min/week of moderate physical activity in the first 6 months of the trial. The trial successfully met its co-primary endpoints:
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1) % average weight loss: Contrave32 patients had an average weight loss of 9.3%, compared with 5.1% in the placebo group, for a placebo-adjusted average weight loss of 4.2%. This result was statistically significant (p<0.001). However, it did not meet FDAs efficacy benchmark of a 5% difference in average weight loss between therapy and placebo. 2) % of patients losing at least 5% of their weight: 66.4% of the patients in the Contrave32 group lost at least 5% of baseline body weight, compared to 42.5% in the in the placebo group. This result on the one hand seems to satisfy the 35% FDA guidance benchmark; on the other hand, the agency could, at least theoretically, question whether the trial satisfied the efficacy requirement, since the proportion of subjects on treatment achieving at least 5% weight loss was approximately 1.5 times that of the number of subjects on placebo, versus the FDA guidance for approximately double. COR-BMOD: Efficacy Data
Key Endpoints n (mITT-LOCF) Mean Weight Loss (%) (mITT-LOCF) 5% weight loss (mITT-LOCF) 10% weight loss (mITT-LOCF) n (Completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate Contrave32 n=482 9.3% 66.4% 41.5% n=301 11.5% 80.4% 55.2% 62% COR-BMOD (NB-302) (n=793) Placebo Difference n=193 5.1% 4.2% 42.5% 23.9% 20.2% 21.3% n=106 7.3% 60.4% 30.2% 55% 4.2% 20.0% 25.0% p-value p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 -
Secondary Endpoints: Contrave treatment improved other secondary anthropometric and cardiometabolic measures: Waist circumference was reduced by 10.0 cm vs. 6.8 cm for placebo, HDL increased by 4.1mg/dL, and triglycerides reduced by 22.2 mg/dL (16.6%). By comparison, patients in the placebo arm increased HDL by 0.9mg/dL and reduced triglycerides by 11.3mg/dL (8.5%). Blood pressure and heart rate: At week 56, systolic blood pressure (SBP) was reduced by 3.9 mm Hg on average in placebo patients, compared with a decrease of 1.3 mm Hg in patients treated with Contrave (p=0.002). Diastolic blood pressure (DBP) was also reduced to different degrees in placebo and Contrave patients, by 2.8 mm Hg and 1.4 mm Hg, respectively (p=0.017). At 56 weeks, there were no significant differences in heart rate between groups (+0.2 bpm for placebo vs. +1.1 bpm for Contrave); however, placebo-adjusted heart rate increases as large as +3.4 bpm were noted in the first 20 weeks of treatment with Contrave.
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Contrave32 -1.5% -28.0% -29.9% -16.6% -25.9% 13.4 -10 cm -1.3 mm Hg -1.4 mm Hg +1.1
Placebo 0.0% -15.5% -16.6% -8.5% -16.9% 10.3 -6.8cm -3.9 mm Hg -2.8 mm Hg +0.2
p-value 0.185 0.003 0.003 0.004 0.165 <0.001 <0.001 0.002 0.017 0.139
Safety & Tolerability: Nausea, mostly mild to moderate in intensity, was the most common AE and more frequently associated with Contrave treatment. Other common AEs included constipation, dizziness, dry mouth, tremor, upper abdominal pain, and tinnitus. There were no differences between groups in the most common psychiatric AEs, such as anxiety, sleep disorder, depressed mood, and insomnia. Depression was more frequent in placebo patients.
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Nausea Headache Constipation Dizziness Vomiting Insomnia Dry mouth Anxiety Tremor Abdominal pain, upper Tinnitus Insomnia Anxiety Sleep disorder Depressed mood Abnormal dreams Middle insomnia Tension Depression Stress Dissociation Nausea Urticaria Anxiety Disturbance in attention Headache Blood pressure increased Dizziness Vomiting Depressed mood Feeling abnormal Abdominal pain Abdominal pain upper Disorientation Dissociation Feeling jittery Insomnia Rash
Contrave32 (n=584) n(%) 199 (34.1) 139 (23.8) 141 (24.1) 85 (14.6) 64 (11.0) 51 (8.7) 47 (8.0) 30 (5.1) 34 (5.8) 32 (5.5) 31 (5.3) Psychiatric AEs 51 (8.7) 30 (5.1) 14 (2.4) 11 (1.9) 8 (1.4) 6 (1.0) 7 (1.2) 2 (0.3) 3 (0.5) 6 (1.0) AEs resulting in discontinuation 27 (4.6) 10 (1.7) 7 (1.2) 6 (1.0) 5 (0.9) 4 (0.7) 4 (0.7) 4 (0.7) 3 (0.5) 3 (0.5) 3 (0.5) 3 (0.5) 3 (0.5) 3 (0.5) 3 (0.5) 3 (0.5) 3 (0.5)
Placebo (n=200) n(%) 21 (10.5) 35 (17.5) 28 (14.0) 9 (4.5) 13 (6.5) 12 (6.0) 6 (3.0) 7 (3.5) 2 (1.0) 3 (1.5) 1 (0.5) 12 (6.0) 7 (3.5) 6 (3.0) 8 (4.0) 4 (2.0) 2 (1.0) 1 (0.5) 5 (2.5) 4 (2.0) 0 (0) 0 (0) 1 (0.5) 3 (1.5) 0 (0) 1 (0.5) 0 (0) 0 (0) 0 (0) 1 (0.5) 1 (0.5) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0)
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Contrave16 n=471 5.0% 39.5% 20.2% n=284 6.7% 54.6% 29.9% 60%
Contrave32 n=471 6.1% 48.0% 24.6% n=296 8.1% 61.8% 34.5% 63%
Placebo n=511 1.3% 16.4% 7.4% n=290 1.8% 23.1% 10.7% 57%
Secondary Endpoints: The Contrave treatment groups also had significant improvements in a number of secondary anthropometric and cardiometabolic parameters compared with the placebo group, including (Contrave32/Contrave16/placebo, p value for Contrave 32 vs. placebo): waist circumference (-6.2 cm vs. -5.0 cm vs. -2.5 cm, p<0.0001); triglycerides (12.7% vs. -8% vs. -3.1%, p<0.0001); hs-CRP (-29% vs. -28% vs. -16.7%, p=0.0076); fasting insulin (-17.1% vs. -11.8% vs. -4.6%, p=0.0007). Patients in the Contrave groups also had improved quality of life scores, as measured by the IWQOL-LITE scale (12.7 vs. 11.7 vs. 8.6, p<0.0001). Blood pressure and heart rate: Mean blood pressure decreased from baseline to 56 weeks in placebo patients. However, both systolic and diastolic blood pressures were unchanged or slightly changed in the Contrave groups. SBP decreased by 0.1 mm Hg and increased by 0.3 mm Hg in the Contrave32 and Contrave16 groups, respectively, compared with a reduction of 1.9 mm Hg in the placebo group. DBP did not change from baseline in the Contrave32 group and increased by 0.1 mm Hg in the Contrave16 group, while placebo patients had a decrease of 0.9 mm Hg. Mean systolic and diastolic blood pressures were noted to increase by approximately 1.5 mm Hg from baseline in the first 8 weeks of Contrave treatment, followed by return to baseline levels after week 12, with subsequent 1 mm Hg decrease for the remaining time in the study. These blood pressure changes were less than those experienced by the placebo group, in which there was a decrease in systolic and diastolic blood pressures of approximately 1.5 mm Hg from baseline during the first 12 weeks and subsequently continued reductions between 1.5 and 3 mm Hg. Heart rates increased up to 1.5 beats per minute from baseline in Contrave patients, while placebo patients maintained baseline heart rates.
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Contrave16 Change in blood fasting glucose Change in insulin Change in HOMA-IR Change in triglycerides Change in hs-CRP Change in IWQOL-LITE Change in waist circumference Change in Systolic blood pressure Change in Diastolic blood pressure Change in Heart rate (beats per minute)
Source: Cowen and Company, Orexigen Therapeutics
Contrave32 -2.6% -17.1% -20.2% -12.7% -29.0% 12.7 -6.2 cm -0.1 mm Hg 0.0 mm Hg +1.0
Placebo -0.7% -4.6% -5.9% -3.1% -16.7% 8.6 -2.5 cm -1.9 mm Hg -0.9 mm Hg -0.1
-1.9% -11.8% -14.3% -8.0% -28.0% 11.7 -5.0 cm 0.3 mm Hg 0.1 mm Hg +1.5
p-value Contrave16 0.1584 0.0628 0.0442 0.0461 0.0159 <0.0001 <0.0001 <0.0001 0.0150 <0.05
p-value Contrave32 0.0104 0.0007 0.0003 <0.0001 0.0076 <0.0001 <0.0001 0.0008 0.0217 <0.05
Safety and Tolerability: The most common adverse event in the Contrave groups was nausea. There was no increase in treatment-emergent psychiatric adverse events, such as depression, suicidality, or other mood-related issues. The rate of serious adverse events did not differ significantly between groups (1.6% for both Contrave groups and 1.4% for placebo). There were no seizures or serious hypertension events. There were two serious cardiovascular adverse events in the Contrave groups, one cardiac failure and one death resulting from MI, but investigators did not consider these events to be treatment-related. COR-I: Safety Data
Contrave16 (n=569) n(%) 1.60% 455 (800%) 155 (272%) 91 (160%) 90 (158%) 49 (86%) 44 (77%) 36 (63%) 36 (63%) 34 (60%) 42 (74%) 32 (56%) 31 (54%) 13 (23%) 76 (134%) 36 (63%) 12 (21%) 9 (16%) Contrave32 (n=573) n(%) 1.60% 476 (831%) 171 (298%) 79 (138%) 90 (157%) 57 (99%) 54 (94%) 43 (75%) 56 (98%) 30 (52%) 43 (75%) 29 (51%) 26 (45%) 30 (52%) 85 (148%) 43 (75%) 9 (16%) 3 (05%) Placebo (n=569) n(%) 1.40% 390 (685%) 30 (53%) 53 (93%) 32 (56%) 64 (112%) 15 (26%) 29 (51%) 14 (25%) 34 (60%) 11 (19%) 31 (54%) 28 (49%) 7 (12%) 62 (109%) 29 (51%) 12 (21%) 6 (11%)
Serious adverse events Participants reporting any adverse event Nausea Headache Constipation Upper respiratory tract infection Dizziness Insomnia Vomiting Sinusitis Dry mouth Nasopharyngitis Diarrhoea Hot fl ush Participants reporting any psychiatric adverse event Insomnia Anxiety Depression
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placebo. The Contrave dose was escalated weekly over the first 3-4 weeks, with full dose reached by the beginning of week 5. To evaluate efficacy and safety of a dose increase in patients with sub-optimal response, Contrave32 patients with < 5% weight loss between weeks 28 and 44 were randomized again double-blind, 1:1 to continue on Contrave32 or escalate to 48 mg SR naltrexone + 360 mg SR bupropion (Contrave48). The two co-primary endpoints of the study were mean weight loss at week 28, and proportion of patients with 5% weight loss at week 28. Eligibility criteria in the trial included: age 18-65 years, and BMI 30-45 kg/m2 or 2745 kg/m2 with controlled hypertension and/or dyslipidemia. Participants were instructed on diet and provided advice on lifestyle/behavioral modification, including exercise instruction, at baseline and weeks 12, 24, 36, and 48. The trial met both its co-primary endpoints: 1) % average weight loss at week 28: At week 28, Contrave32 patients had an average weight loss of 6.5%, compared with 1.9% in the placebo group. This significant difference was maintained at 56 weeks, with Contrave patients losing 6.4% of body weight and placebo patients losing 1.2%, for a placebo-adjusted average weight loss of 5.2%. These results were statistically significant. The 56-week result did meet FDAs efficacy benchmark of a 5% difference in average weight loss between therapy and placebo. 2) % of patients losing at least 5% of their weight: At week 28, 55.6% of the patients in the Contrave32 group lost at least 5% of baseline body weight, compared to 17.5% in the placebo group. This significant difference was also maintained at 56 weeks, with 50.5% of Contrave patients losing 5% of body weight, compared with 17.1% of placebo patients. With these data, Contrave met the categorical weight loss threshold specified in FDA's draft guidance for efficacy of obesity drugs. COR-II: Efficacy Data
COR-II (NB-303) (n=1,496) Key Endpoints n (mITT-LOCF) Mean Weight Loss (%) (mITT-LOCF) 5% weight loss (mITT-LOCF) 10% weight loss (mITT-LOCF) n (Completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate Contrave32 n=825 6.5% 55.6% 27.3% n=619 7.8% 68.8% 35.7% 75% Placebo n=456 1.9% 17.5% 7.0% n=319 2.4% 22.3% 9.4% 70% Difference 4.6% 38.1% 20.3% 5.4% 46.5% 26.3% p-value p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 Contrave32 n=702 6.4% 50.5% 28.3% n=434 8.2% 64.9% 39.4% 62% Placebo 56 weeks n=456 1.2% 17.1% 5.7% n=267 1.4% 21.7% 7.9% 59% 5.2% 33.4% 22.6% 6.8% 43.2% 31.5% p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 Difference p-value
Secondary Endpoints: As in the other trials in the COR program, Contrave treatment also resulted in improvements of a number of secondary anthropometric and cardiometabolic parameters, such as waist circumference, triglycerides, fasting insulin, and HOMA-IR. There
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was similarly also improvement in quality of life with Contrave treatment versus placebo, as measured by the IWQOL-Lite score, including physical function self-esteem, and sexual life. Blood pressure and heart rate: At week 56, mean SBP was elevated by 0.6 mm Hg in the Contrave group, but decreased by 0.5 mm Hg in the placebo group. Mean DBP was elevated in both groups, by 0.4 mm Hg and 0.3 mm Hg, respectively. Heart rate remained unchanged with placebo, and a +1 bpm increased rate was noted in the Contrave group. COR-II: Key Secondary Endpoints
Contrave32 Change in blood fasting glucose Change in insulin Change in HOMA-IR Change in triglycerides Change in hs-CRP Change in IWQOL-LITE Change in waist circumference Change in Systolic blood pressure Change in Diastolic blood pressure Change in Heart rate (beats per minute)
Source: Cowen and Company, Orexigen Therapeutics
-2.1 mg/dL -14.1% -16.4% -7.3% -9.4% 9.9 -6.2 cm -0.9 (mm Hg) +0.2 (mm Hg) -
Placebo 28 weeks -1.7 mg/dL -0.5% -4.2% -1.4% -1.1% 6.2 -2.7 cm -1.2 (mm Hg) -0.7 (mm Hg) -
p-value 0.0544 <0.001 <0.001 0.007 0.091 <0.001 <0.001 0.556 0.017 -
Placebo p-value 56 weeks -2.8 mg/dL -1.3 mg/dL 0.051 -11.4% 3.5% <0.001 -13.8% 1.2% <0.001 -9.8% -0.5% <0.001 -28.8% -8.3% <0.001 10.9 6.4 <0.001 -6.7 cm -2.1 cm <0.001 +0.6 (mm Hg) -0.5 (mm Hg) 0.039 +0.4 (mm Hg) +0.3 (mm Hg) 0.847 +0.8 -0.3 <0.05
Contrave32
Safety and tolerability: Consistent with the other COR trials, the most common treatmentemergent AEs were nausea, headache, and constipation, which were usually mild to moderate in intensity. There were no differences between the Contrave and placebo groups in psychiatric measures, such as sadness, irritability, tension, and suicidality. Contrave was not associated with increased depression or other mood-related AEs. Serious AE rates were similar between the Contrave (2.1%) and placebo (1.4%) groups. In the Contrave group, there was one MI in a patient with CV history and one seizure.
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Participants (%) reporting any adverse event Nausea Constipation Headache Insomnia Dry mouth Upper respiratory Vomiting Nasopharyngitis Dizziness Diarrhea Sinusitis Arthralgia Bronchitis Participants (%) reporting any psychiatric AEs Insomnia Anxiety Depression Sleep disorder Participants (%) reporting any adverse event leading to discontinuation Nausea Headache Depression Cardiovascular endpoints Systolic blood pressure, change from baseline (mm Hg) Diastolic blood pressure, change from baseline (mm Hg) Heart rate, change from baseline to Week 56 (bpm)
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these data, Contrave met the categorical weight loss threshold specified in FDA's draft guidance for efficacy of obesity drugs. COR-Diabetes: Efficacy Data
Key Endpoints n (mITT-LOCF) Mean Weight Loss (%) (mITT-LOCF) 5% weight loss (mITT-LOCF) 10% weight loss (mITT-LOCF) n (Completers) Mean Weight Loss (%) (Completers) 5% weight loss (Completers) 10% weight loss (Completers) Completion rate Contrave32 n=265 5.0% 44.5% 18.5% n=175 5.9% 53.1% 26.3% 66% COR-Diabetes (NB-304) (n=505) Placebo Difference n=159 1.8% 3.2% 18.9% 25.6% 5.7% 12.8% n=100 2.2% 24.0% 8.0% 62% 3.7% 29.1% 18.3% p-value p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 p<0.001 -
Secondary Endpoints: Anthropometric and cardiometabolic parameters were generally improved with Contrave, similar to the other COR trials. In this diabetic population, glycemic control was improved with Contrave treatment. Contrave patients with baseline HbA1c > 8% showed a reduction of 1.1%, compared with 0.5% reduction in placebo patients (p<0.01). More than 44% of Contrave patients reached the American Diabetes Association treatment target of HbA1c level < 7%, compared with 26% of placebo patients (p<0.001). COR-Diabetes: Key Secondary Endpoints
Change in HbA1c Proportion of subjects with HbA1c <7% Change in triglycerides Change in hs-CRP Change in IWQOL-LITE Change in waist circumference
Source: Cowen and Company, Orexigen Therapeutics
Safety and tolerability: Consistent with the other COR trials, the most common treatmentemergent AEs included nausea and constipation. The overall safety profile was consistent with that demonstrated in other COR trials. The incidence of hypoglycemia was similar between the groups.
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Participants (%) reporting any AEs Nausea Vomiting Constipation Diarrhea Headache Dizziness Insomnia Hypertension Hypoglycemia Tremor Dry mouth Anxiety Upper respiratory
Source: Cowen and Company, Orexigen Therapeutics
Contrave 32 n=333 90.4% 42.3% 18.3% 17.7% 15.6% 13.8% 11.7% 11.1% 9.9% 7.5% 6.6% 6.0% 5.4% 5.1%
Placebo n=169 85.2% 7.1% 3.6% 7.1% 9.5% 8.9% 5.3% 5.3% 4.1% 7.1% 2.4% 3.0% 1.2% 1.8%
COR Program (n=1,038) >5% weight loss at 16 weeks % Meeting responder definition % Weight loss at 1 year
Source: Cowen and Company, Orexigen
51.0% 11.3%
Similarly, approximately 62% and 73% of the patients in the COR program and COR-BMOD trial, respectively, met the responder definition of achieving >3% weight loss at week 12. This patient population achieved meaningful weight loss of 10.3% and 12.7%, respectively, in the trials after one year of treatment. We believe that only responders will continue treatment with Contrave after 16 weeks. The representative weight loss in the Contrave responder patient population is similar to that achieved by treatment with either Qsymia or BELVIQ.
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COR Program (n=1,038) >5% weight loss at 16 weeks % Meeting responder definition % Weight loss at 1 year 51.0% 11.3%
COR BMOD (n=322) 67.0% 13.4% COR BMOD (n=352) 73.0% 12.7%
>3% weight loss at 12 weeks COR Program (n=1,268) % Meeting responder definition 62.0% % Weight loss at 1 year
Source: Cowen and Company, Orexigen
10.3%
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Safety and Tolerability Data From Contrave's Four Phase III COR Trials
Treatment-Emergent Adverse Events Discontinue treatment due to any AE Nausea Headache Dizziness Vomiting Insomnia Anxiety Urticaria Depression Blood pressure increased Rash Hypertension Fatigue Palpitations Abdominal pain Tremor
Source: Cowen and Company, Orexigen
Placebo (N=1,515) 181 (11.9%) 3 (0.2%) 9 (0.6%) 5 (0.3%) 1 (<0.1%) 7 (0.5%) 10 (0.7%) 4 (0.3%) 13 (0.9%) 3 (0.2%) 2 (0.1%) 0 3 (0.2%) 0 1 (<0.1%) 1 (<0.1%)
Contrave Contrave (naltrexone 16mg) (naltrexone 32mg) (N=633) (N=2,545) 139 (22.0%) 32 (5.1%) 10 (1.6%) 15 (2.4%) 4 (0.6%) 5 (0.8%) 1 (0.2%) 3 (0.5%) 6 (0.9%) 3 (0.5%) 1 (0.2%) 3 (0.5%) 3 (0.5%) 5 (0.8%) 5 (0.8%) 3 (0.5%) 612 (24.0%) 160 (6.3%) 43 (1.7%) 23 (0.9%) 28 (1.1%) 17 (0.7%) 19 (0.7%) 16 (0.6%) 10 (0.4%) 10 (0.4%) 12 (0.5%) 7 (0.3%) 7 (0.3%) 4 (0.2%) 4 (0.2%) 6 (0.2%)
Contrave (combined 16/32 data) (N=3,239) 771 (23.8%) 203 (6.3%) 55 (1.7%) 42 (1.3%) 35 (1.1%) 23 (0.7%) 21 (0.6%) 19 (0.6%) 16 (0.5%) 13 (0.4%) 13 (0.4%) 11 (0.3%) 10 (0.3%) 10 (0.3%) 9 (0.3%) 9 (0.3%)
p-value <0.001 <0.001 0.002 0.001 <0.001 0.290 0.843 0.198 0.144 0.276 0.125 0.021 0.518 0.031 0.157 0.141
Summary of Contraves Regulatory History The AdCom gives Contrave a surprise 13-7 positive nod
The EMDAC (Endocrinologic and Metabolic Drugs Advisory Committee) of the FDA met to consider the Contrave NDA on December 7, 2010. Given that the AdCom had previously voted against the approvals of both BELVIQ and Qsymia, there was low investor expectation for a positive vote. Thus, the 13-7 vote in favor of Contrave approval for treatment of obesity came as a surprise. While panel members viewed Contraves efficacy as modest, they considered it to meet FDA requirements for weight loss efficacy. In view of the modest benefit, a key issue was Contraves safety, with CV safety being the greatest concern to advisory panel members. In the COR Phase III program, overall mean elevations in BP and HR were associated with Contrave treatment relative to placebo. Both the FDA and Orexigen agreed that a cardiovascular outcomes trial (CVOT) would be required. However, the key question revolved around the timing requirement of the study, specifically before or after potential approval. There was debate between panel members considering the CV risk as low and definable in a quickly conducted trial and those worried about the potential need to withdraw another obesity drug from the market after approval, with resulting loss of FDA credibility. The panel ultimately voted 11-8 for CVOT completion post-approval.
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S y s to l i c b l o o d p re s s u re , m m H g M e an c hang e D i ffe re n c e fro m p l a c e b o (m m H g ) D i a s to l i c b l o o d p re s s u re , m m H g M e an c hang e D i ffe re n c e fro m p l a c e b o (m m H g ) -0 . 3 7 + 1.13 -1 . 1 4 + 0.36 -1 . 0 1 + 0.51 -1 . 5 -0 . 2 4 + 2.09 -0 . 9 4 + 1.39 -0 . 8 2 + 1.54 -2 . 3 3
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during the 16-week period will discontinue treatment. However, as part of the ITT population, their MACE events, if any, will be included in the final study analysis . LIGHT Study Design
Orexigen expects that, after Week 16, approximately 50% of patients in both trial arms will have discontinued study treatment, either resulting from standard drop-outs or from meeting criteria for discontinuation at 16 weeks. These patients will be counted in the ITT population. Primary Endpoint: The primary endpoint of the trial is time from treatment period randomization to the first confirmed occurrence of MACE events. The time frame extends from Day 1 to first confirmed occurrence, assessed up to 4 years. LIGHT Study Population: Inclusion and exclusion criteria for the trial reflect the target background annual 1%-1.5% CV event risk. Using U.S. population-based data sets, for example NHANES, Orexigen targeted enrollment of a patient population with a modeled background annual MACE rate of > 2%, expecting to observe a MACE rate of about 1.5%. The trial population included females 50 years old and males 45 years old, with BMI range 27 50 kg/m2. Subjects were required to have 1) cardiovascular disease; or 2) diabetes mellitus, with at least two of four additional risk factors; or 3) both: CV disease was identified by at least one of the following: history of MI >3 months prior to screening, history of coronary/carotid/peripheral revascularization procedures, angina with ischemia, evidence of peripheral vascular disease, or 50% arterial stenosis (coronary/carotid/lower extremity vessel) within prior 2 years. Otherwise, instead of, or in addition to, CV disease, patients had type 2 diabetes mellitus accompanied by at least two of the following conditions: controlled hypertension with BP<145/95mmHg, dyslipidemia requiring pharmacotherapy, low HDL cholesterol (< 50 mg/dL in women or < 40 mg/dL in men), or current smoking history.
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Particularly high-risk individuals, such as those with MI within 3 months, unstable angina, stroke history, tachyarrhythmia history, planned bariatric surgery/cardiac surgery/coronary angioplasty, or life expectancy < 4 years, were excluded. The following table illustrates the characteristics of 8,911 patients enrolled in LIGHT. Patient Characteristics in LIGHT Study
Characteristics Age Younger age group Gender Minority CV disease Diabetes Smoking status
LIGHT Study Enrollment: The trial began enrolling patients on June 6, 2012. On September 5, 2012, Orexigen announced that the LIGHT study was enrolling patients more quickly than anticipated, with > 4,500 patients enrolled as of August 31, 2012. On December 18, 2012, the company announced the completion of screening and enrollment, accomplished within 6.5 months of initiation, indicating that 13,192 patients had been screened for the study, of which approximately 10,400 patients met eligibility criteria, were enrolled, and entered the lead-in period. Ultimately 8,911 patients were then randomized to the treatment period. The company has stated that the final population in the trial is sufficient for and reflective of the targeted 11.5% annual MACE rate. LIGHT Trial Enrollment Faster Than Expected
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anthropometric and cardiometabolic parameters. Results from the study are anticipated by YE13.
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Takeda Takeda owns rights to U.S., Canada and Mexico; Orexigen owns rights to rest of the wold Partnered with Takeda in September 2010 $50M 20-35% $20M on U.S. approval, $10M upon the delivery of launch supplies to Takeda and $70M on first commercial sales. up to $1B US patents expire 2024-2025
Orexigens IP Estate
Contrave is covered by an intellectual property estate for which Orexigen has exclusive rights. The compositions of matter for Contrave as well as its use for obesity, will be protected in the U.S. and abroad until at least 2024-25. Orexigen holds U.S. Patents # 7,375,111 and 7,462,626, entitled Compositions For Affecting Weight Loss. As stated in the patent abstracts, Disclosed are compositions for affecting weight loss comprising a first compound and a second compound, where the first compound is an opioid antagonist and the second compound causes increased agonism of a melanocortin 3 receptor (MC3-R) or a melanocortin 4 receptor (MC4-R) compared to normal physiological conditions. Also disclosed are methods of affecting weight loss, increasing energy expenditure, increasing satiety in an individual, or suppressing the appetite of an individual, comprising
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identifying an individual in need thereof and treating that individual to antagonize opioid receptor activity and to enhance -MSH activity. The company refers to these patents as the Weber/Cowley composition patent and the Weber/Cowley methods patent, respectively. Collectively, these patents are known as the Weber/Cowley patents and cover the current composition of Contrave and methods of administering Contrave to treat obesity. The composition patent expires in March 2025, and the methods patent expires in July 2024. The European Patent Office has granted the European version of the Weber/Cowley patents, published as EP1617832 B1. This patent has been issued in numerous countries throughout the European Union, providing coverage for Contrave until at least 2024. Orexigen has also filed a number of international patent applications in foreign countries.
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In June 2010, the company announced that, based on feedback from the FDA, it decided to reinitiate the global Phase III liraglutide obesity program. The clinical trial program evaluating safety and efficacy of liraglutide 3 mg for weight management is known as the SCALE (Satiety and Clinical Adiposity-Liraglutide Evidence in Non-diabetic and Diabetic People) program. It is comprised by four Phase III trials with approximately 5,000 obese (BMI 30 kg/m 2) and overweight (BMI 27 kg/m2) patients with comorbidities, such as hypertension, dyslipidemia, or type 2 diabetes: SCALE Maintenance: This was a 56-week, randomized, double-blind, placebo-controlled evaluating weight loss maintenance with liraglutide 3 mg vs. placebo in 422 obese and overweight patients after successfully achieving 5% weight loss during a 12-week run-in period consisting of a lifestyle modification program with low calorie diet and exercise alone. After the run-in period, patients were randomized for the 56-week main trial period to daily liraglutide 3 mg or placebo. Patients then discontinued treatment and were followed for an additional observation period of 12 weeks. Diabetic patients were excluded from the trial. The 3 co-primary endpoints were: 1) mean change in body weight from baseline; 2) proportion of patients maintaining full run-in weight loss; and 3) proportion of patients losing 5% of body weight from week 0 (i.e., achieving further weight loss after randomization). SCALE Diabetes: This was a 56-week, randomized, double-blind, placebo-controlled trial in 846 obese and overweight patients with type 2 diabetes, evaluating safety and efficacy of liraglutide 3 mg vs. liraglutide 1.8 mg and placebo to induce and maintain weight loss in diabetic patients over 56 weeks, when added to background diabetes treatment, consisting of metformin, a sulfonylurea, or glitazone as single-agents or in combination. Patients were randomized 2:1:1 to treatment with daily liraglutide 3 mg, liraglutide 1.8 mg, or placebo. Treatment was discontinued at 56 weeks, and patients were followed during an additional 12week observation period. The co-primary endpoints were: 1) change in mean body weight from baseline; 2) proportion of patients losing 5% body weight from baseline; and 3) proportion of patients losing 10% body weight from baseline. SCALE Obesity and Pre-Diabetes: This is a 56-week/160-week randomized, double-blind, placebo-controlled trial in 3,731 obese and overweight patients with comorbidities, evaluating safety and efficacy of liraglutide 3 mg vs. placebo to induce and maintain weight loss, as well as to delay onset of type 2 diabetes in pre-diabetic patients. Patients with known diabetes (HbA1c 6.5%) are excluded from the trial. Patients without pre -diabetes are randomized 2:1 to daily liraglutide 3 mg or placebo for 56 weeks. After 56 weeks, patients are re-randomized to receive liraglutide or placebo for an additional 12 weeks. Pre-diabetic patients are randomized to liraglutide 3 mg or placebo for 160 weeks. The co-primary endpoints are: 1) change in mean body weight from baseline to week 56; 2) proportion of patients losing 5% body weight from baseline at week 56; 3) proportion of patients losing 10% body weight from baseline at week 56; and 4) proportion of patients with onset of type 2 diabetes at 160 weeks. SCALE Sleep Apnea: This is a 32-week randomized, double-blind, placebo-controlled trial in approximately 340 obese patients with moderate or severe obstructive sleep apnea (OSA), evaluating efficacy of liraglutide 3 mg in combination with diet and exercise vs. placebo to
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reduce the severity of OSA. Patients must be unwilling or unable to use continuous positive airway pressure (CPAP) treatment and must not have had CPAP treatment for at least 4 weeks prior to screening. Diabetic patients (HbA1c 6.5%) ar e excluded from the trial. Patients are randomized to daily liraglutide 3 mg or placebo, both in combination with diet and exercise, for 32 weeks. The primary endpoint of the trial is change in apnea-hypopnea index (AHI) from baseline. SCALE Phase III Trial Program
Study Name Study Type SCALE Maintenance SCALE Diabetes SCALE Obesity and Pre-Diabetes SCALE Sleep Apnea
Phase III, randomized, double-blind, placebo-controlled 12-week run-in period, followed by a 56-week treatment 56-week treatment period followed period, followed by 12-week observation period by 12-week observation period Obese/overweight patients who have achieved 5% weight loss after 12-week run-in period of lifestyle modification program with low calorie diet and exercise alone BMI 30 kg/m2 and BMI 27 kg/m2 with comorbidities, such as hypertension or dyslipidemia 422 liragultide 3.0 mg vs. placebo Without pre-diabetes: 56-week treatment period, followed 12-week re-randomization period With pre-diabetes: 160-week treatment period Obese/overweight patients with comorbidities, including pre-diabetes BMI 30 kg/m2 and BMI 27 kg/m2 with comorbidities, such as hypertension or dyslipidemia 3,731 liragultide 3.0 mg vs. placebo
Study Duration
Disease Setting
Obese/overweight patients with type 2 diabetes BMI 27 kg/m2 with type 2 diabetes (HbA1c 7.0-10.0%) 846 liragultide 3.0 mg vs. liragultide 1.8 mg vs. placebo (2:1:1 randomization) 1) Mean change in body weight from baseline 2) Proportion of patients losing 5% body weight 3) Proportion of patients losing 10% body weight June 2011 March 2013
Obese patients with moderate or severe obstructive sleep apnea (OSA) BMI 30 kg/m2 with diagnosis of moderate or severe OSA 340 liragultide 3.0 mg vs. placebo
Treatment Regimen
Primary Endpoint
1) Mean change in body weight from baseline 2) Proportion of patients maintaining full run-in weight loss 3) Proportion of patients losing 5% of body weight from week 0 (i.e., achieving further weight loss after randomization). October 2008 2010
1) Mean change in body weight from baseline to week 56 2) Proportion of patients losing 5% body weight at week 56 Change in apnea-hypopnea index 3) Proportion of patients losing 10% (AHI) from baseline body weight at week 56 4) Proportion of patients with onset of type 2 diabetes at 160 weeks June 2011 May 2013 June 2012 4Q13
Data from SCALE Maintenance: Results were presented at the ADA and EASD meetings in 2011. Patients in the trial had average age of 46 years and average BMI of 38 kg/m 2, with an average run-in weight loss of 6%. At 56 weeks after randomization, 81% of liraglutide patients maintained this run-in weight loss, compared with 49% of placebo patients. Liraglutide treatment also resulted in an additional mean weight loss of 6% after randomization, while there was minimal additional weight loss (0.1%) in the placebo group. 51% of liraglutide patients lost 5% of body weight after randomization, compared with 22% of placebo patients. The most common adverse event was nausea, which occurred in 48% of patients. Data from SCALE Diabetes: Topline data were announced in March 2013. Patients had baseline mean weight of 233 pounds and baseline average BMI of 27 kg/m 2. The trial
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successfully met all three endpoints, with all differences for both liraglutide doses being statistically significant. At 56 weeks, the mean weight loss in the liraglutide 3 mg and 1.8 mg groups was 6% and 5%, respectively, compared with 2% in the placebo group. 50% (3 mg) and 22% (1.8 mg) of liraglutide-treated patients lost 5% of body weight from baseline, compared with 13% in the placebo group, while 35% (3 mg) and 13% (1.8 mg) of liraglutidetreated patients lost 10% of body weight from baseline, versus 4% for placebo. During the 12 week follow-up period, patients from both liraglutide treatment groups had modest re-gain of weight. Starting from baseline HbA1c of 8%, more patients in the liraglutide 3 mg and 1.8 mg groups, 69% and 67%, respectively, achieved HbA1c level 7% (ADA target recommendation), compared with 27% of placebo patients. The most common adverse events were reported as gastrointestinal in nature. SCALE Diabetes Efficacy Data
liraglutide 3 mg Mean Weight Loss (%) 6% >5% Weight Loss 50% >10% Weight Loss 22% Completion rate 77% Patients achieving HbA1c target of 7% 69%
Source: Cowen and Company, Novo Nordisk
Data from SCALE Obesity and Pre-Diabetes: Topline data for all patients at 56 weeks were announced in May 2013. The trial succeeded in all three co-primary endpoints at 56 weeks. Patients had mean baseline BMI of 38 kg/m2, and 61% had pre-diabetes at randomization. At 56 weeks, the average weight loss with liraglutide 3 mg was 8% vs. 2.6% on placebo. Liraglutide patients had greater categorical weight loss of 5% (64% vs. 27%) and 10% (33% vs. 10%) compared to placebo. At 56 weeks, 69% of the pre-diabetes subgroup receiving liraglutide eliminated signs of pre-diabetes, compared to 33% of the placebo group. Of the 39% of patients without baseline pre-diabetes, 7% of liraglutide patients and 21% of placebo patients eventually developed pre-diabetes. The company stated that all differences between liraglutide and placebo were statistically significant, though specific statistical values were not provided. The most common AEs were reported to be GI-related and diminishing over time. Whats next? The Phase III SCALE Sleep Apnea trial was completed in 3Q13. The company expects to file for approval of liraglutide 3 mg as an obesity treatment in the U.S. and E.U. around YE13 (around the turn of the year).
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4) Orexigens Empatic
Orexigens Empatic is a combination of bupropion and zonisamide, for the treatment of obese patients with high BMI (high 30 kg/m2 range and beyond). Although zonisamide is rarely used for weight loss, it does have appetite suppressant effects, which may be related to enhancement of dopamine and serotonin neurotransmission. It is generally well-tolerated, although headache and somnolence are reported to occur with some frequency. Zonisamide went generic in the U.S. in 2005. As with naltrexone in Contrave, Orexigen has developed a proprietary, sustained-release form of zonisamide, which has shown improved tolerability compared to the generic IR form, with significant reduction in the incidence of spontaneous adverse events. Empatic has been evaluated in two Phase IIb trials (Study ZB-201 and ZB202).
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The most common side effects were nausea, headache, and insomnia. The most common AEs resulting in discontinuation were insomnia, headache and urticarial (hives). According to Orexigen, no patients experienced serious AEs related to Empatic, and there were no statistically or clinically meaningful difference in incidence of depression, anxiety, suicidality, and impaired cognition with Empatic treatment compared to placebo. Our consultants have noted these potential CNS effects as causing some hesitation to use zonisamide, and they are interested to see results in a larger patient population receiving Empatic. Whats next for Empatic? In March 2013, Orexigen announced that, in a series of discussions about continued development of Empatic, FDA indicated Phase III data for Empatic may be sufficient to support a NDA submission without additional data from a CVOT. Also, the company guided that, should there be no CV signals in the Empatic development program and if placebo-adjusted body weight, blood pressure, and heart rate changes are similar to or more favorable than those observed with Contrave, FDA has stated reassuring results of a CVOT with Contrave will be sufficient. Furthermore, Orexigen reported that the FDA will allow Phase III studies of Empatic to include women of childbearing age, despite teratogenicity concerns resulting from the zonisamide component. Orexigen has indicated its thinking at this point that, prior to initiating Phase III development of Empatic, it seeks a collaboration partner to help fund clinical development and future commercialization.
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Safety Data: The most frequent AEs were decreased appetite, vivid dreams, and sleep disturbance, which resulted in two drop-outs from the 4.0 mg arm. There were no severe AEs, serious AEs, or deaths. There were no clinically significant, abnormal laboratory or ECG findings. Subcutaneous doses of beloranib less than 4.0 mg appeared to have clinical utility in balancing effectiveness and tolerability. Current Status: Based on the activity observed in the two Phase Ib trials, Zafgen advanced beloranib into Phase II development. In November 2012, a Phase IIa clinical trial testing beloranib for the treatment of severe obesity was initiated. This is a randomized, double-blind, placebo-controlled, dose ranging, Phase IIa trial evaluating weight loss, safety, and PK with beloranib in ~150 obese patients, both with and without type 2 diabetes. Patients will be randomized to receive either placebo or beloranib as a subcutaneous injection for 12 weeks. They are allowed to eat normally and are not counseled to change their exercise habits. The primary endpoints of the trial are safety and change in body weight from baseline. Phase IIa Trial Interim Data, ADA 2013: Interim data for 19 patients who completed the 12week treatment period were presented at the ADA meeting in June 2013. Enrolled patients have a mean age of 40 years, with an average body weight of 101.2 kg and BMI of 37.9 kg/m 2. There were 148 patients randomized to treatment with beloranib 0.6 mg (n=37), 1.2 mg (n=37), or 2.4 mg (n=36), or placebo (n=38). The 19 patients for which data were presented had been randomized as follows: beloranib 0.6 mg (n=5), 1.2 mg (n=6), or 2.4 mg (n=3), and placebo (n=5). After 12 weeks of treatment, patients treated with 0.6 mg, 1.2 mg, or 2.4 mg of beloranib had average weight losses of 3.8 kg, 6.1 kg, and 9.9kg, respectively, compared with a weight gain of 1.8 kg in the placebo group (all p<0.005 vs. placebo). The most common AEs with beloranib included nausea, vomiting, and sleep disturbance. There were no serious AEs or deaths. Full data from the trial are expected in 2013.
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Preclinical Studies: Results from preclinical evaluation of RM-493 in a non-human primate (monkeys) model of diet-induced obesity were published in 2012 (Kievit P et al., Diabetes 2012). A dose response study, evaluating doses of 0.17, 0.5, and 1.5 mg/kg/day) in lean animals demonstrated that a RM-493 dose of 0.5 mg/kg/day maximally reduced food intake, and this dose was used for further study. Twelve adult (age 9-11 years) male rhesus macaque monkeys, with body weights of 9-19 kg, were studied. The monkeys had been provided a highfat diet (32% of calories from fat) and daily calorie-rich treats for 1.5 years. Nine monkeys were obese, insulin-resistant, and hypertensive; they were classified as diet-sensitive. Three monkeys had normal body weight and blood pressure, and were classified as lean or diet resistant. The animals were treated with delivery vehicle a lone for 4 weeks to obtain baseline values. Then, they received 0.5 mg/kg/day of RM-493 for a total of 8 weeks. Efficacy Results in Monkeys: Food intake decreased significantly, by 35%, in the first week of treatment with RM-493. However, food intake then normalized by weeks 4 through 7 and increased by 8 weeks, compared to levels during the previous vehicle delivery alone period. Both the obese and lean monkey groups showed comparable decreases in food intake. The monkeys lost an average of 1 kg of body weight during the first 4 weeks of treatment. They also continued to lose weight through the treatment period, with a total average weight loss of 1.5 kg (~10%) at 8 weeks. The average peak weight loss was 13.5% of body weight, with 8/12 of the monkeys continuing to lose weight for 2 weeks after treatment was discontinued. Daytime activity was noted to increase during the treatment period, nearly doubling by Week 8, through there was no significant relationship between weight loss amount and activity increase on statistical analysis. Energy expenditure (measured by carbon dioxide production) was also increased by 14% at the end of treatment. CV Safety Results in Monkeys: Potential cardiovascular side effects of increased heart rate and blood pressure have been associated with MC4R agonist treatment in humans. The monkeys were implanted with telemetry devices in order to measure blood pressure and heart rate during the delivery vehicle and treatment periods. Throughout the RM-493 treatment period, there were no increases in heart rate or blood pressure measured in the animals. Heart rate significantly decreased in the treatment period, compared to the delivery vehicle period (average morning HR 128 bpm vs. 141 bpm; average evening HR 98 bpm vs. 111 bpm; p=0.008 for the course of the treatment). There were also decreases in DBP during treatment compared to the delivery vehicle period (79-80 mm Hg vs. 83-84 mm Hg), whereas SBP did not significantly differ (129-130 mm Hg vs. 129-133 mm Hg). Phase II Trial in Obese Patients: This is a randomized, double-blind, placebo-controlled, Phase II trial evaluating RM-493 versus placebo in adult (ages 18-65 years) obese patients, with BMI range of 35-50 kg/m2. Patients must have had stable body weight ( 5 kg) in the prior 6 months, and blood pressure must be < 140/90 mm Hg, with use of up to 2 anti-hypertensive medications allowed. Patients with uncontrolled hypertension, diabetes (fasting blood glucose > 140 mg/dL and HbA1c 6.5%), and psychiatric disorders (including major depression) are excluded. Treatment will be administered with RM-493 (1 mg/14 hrs via subcutaneous infusion) for 90 days or placebo (subcutaneous infusion) for 90 days. The primary endpoint of the trial is mean percentage change in weight loss. Secondary endpoints include the proportion
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with loss of 5% baseline body weight, PK, effect on hunger/satiety, quality of life, and safety. The trial has an estimated enrollment of 70 patients and an estimated completion date in October 2013. Phase Ib Trial in Patients with MC4R Gene Deficiency: In September 2013, Rhythm announced initiation of the first in a series of RM-493 trials for treatment of obesity in patients with a genetic loss-of-function deficiency in the MC4R pathway. This is a Phase Ib trial which will evaluate efficacy and safety of RM-493 in obese patients with a loss-of-function mutation in the MC4R gene. Patients will receive up to 4 weeks of treatment with RM-493. According to Rhythm, this study expands the ongoing Phase II program.
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In August 2013, Arena announced the completion of the Phase Ib trial. There were no serious adverse events observed. The most frequent treatment-emergent AEs were headache, nausea, and jaw pain. There was one serious AE, transient atrial fibrillation, which occurred in a single patient and was considered possibly treatment related. Arena announced that a Phase II trial of APD811 will be initiated in 1Q14. APD334: This agent is a S1P1 (sphingosine 1-phosphate subtype 1) receptor agonist, currently in Phase I development for the potential treatment of autoimmune diseases, including multiple sclerosis and rheumatoid arthritis. S1P1 receptors are involved in the modulation of several biological responses, including lymphocyte trafficking from lymph nodes to peripheral blood. Five S1P receptors have been identified. A non-selective oral S1P agonist, fingolomod, (Novartiss Gilenya) has demonstrated lowering of lymphocyte counts in blood and is approved for the treatment of multiple sclerosis. Arena has optimized potent and selective small molecule S1P1 receptor agonists, such as APD334, that reduce severity of disease in preclinical autoimmune disease models of multiple sclerosis, such as the experimental autoimmune encephalomyelitis (EAE) model and the collagen-induced arthritis (CIA) model. Phase I trial: In April 2013, Arena announced the advancement of APD334 into Phase I clinical development with the initiation of dosing in a Phase I randomized, double-blind, placebo-controlled trial, evaluating safety, tolerability and PK of single-ascending doses of APD334 in up to 64 healthy adult volunteers. In August 2013, Arena reported that dosing was completed in the trial. Preliminary results demonstrated reduction in blood lymphocyte count (the desired benefit), but a reduction in heart rate (an AE observed with other S1P1-targeting drugs). Further data evaluation is ongoing. APD371: This agent is a CB2 receptor agonist currently in preclinical development for the treatment of pain. Arena has identified several novel, potent, CB2-selective, orally available compounds that are intended to retain the analgesic activity of CB receptor agonists while avoiding psychotropic side effects.
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So, What Do Physicians Think About All This? Our Two Obesity Surveys
Obesity remains, and according to most experts and projections, will continue to be a major public health issue in the United States and a significant portion of the developed world. The most recent national data from the CDC on obesity prevalence indicate that more than onethird of U.S. adults (35.7%) are obese, equating to over 71 million people. According to NIH guidelines (Clinical Guidelines on the Identification, Evaluation, and Treatment of Overweight and Obesity in Adults: The Evidence Report, NIH Publication 98-4083) on obesity treatment, pharmacotherapy may provide a beneficial adjunct to dietary, activity, and behavioral modifications in selected individuals, including: those with BMI 30 kg/m 2 (obese) and no concomitant risk factors, or those with BMI 27 kg/m2 (overweight) and comorbidities such as hypertension, dyslipidemia, type 2 diabetes, coronary artery disease (CAD), and sleep apnea. There has been a difficult market history for weight-loss drugs, stymied by major safety issues. After more than a decade without the approval of a new weight-loss drug, and after handing out an initial round of rejections to each of the three most recent anti-obesity agents under review, the FDA approved BELVIQ (lorcaserin, Arena Pharmaceuticals) in late June 2012. Three weeks later, in July 2012, Qsymia (phentermine/topiramate, Vivus) was also approved. Qsymia became available in the U.S. market first, in mid-September 2012, and BELVIQ was commercially launched in June 2013. The third agent, Contrave (naltrexone/bupropion, Orexigen Therapeutics) was also denied approval by the FDA in 2011, based on cardiovascular safety concerns, with a cited requirement for a cardiovascular outcomes trial (CVOT). The FDA has notified Orexigen that it supports a faster path to NDA resubmission for Contrave and provided guidance on design of the LIGHT study, the Contrave CVOT, which has completed enrollment and is currently ongoing. Interim analysis of the LIGHT Study is expected by December 2013, and NDA resubmission is anticipated by YE13. In order to gain further insight into the evolving obesity therapeutics market and to gauge physician perceptions of these new agents, we have conducted two surveys with a total of 100 U.S. physicians. The first survey polled 50 primary care physicians (PCPs) who, while not specializing in obesity management, have familiarity with the clinical profiles of the new obesity drugs and would be open to using these agents in their practices (The PCP Survey). The second survey polled 50 physicians who specialize in obesity management and currently prescribe weight-loss medications (The Obesity Specialist Survey). We report the findings from both of our surveys. Our key conclusions follow: 1) Qsymia is considered to have the strongest weight-loss efficacy and is projected to be the obesity drug market leader. Despite the majority of PCPs in our survey having no (62%) or very little (28%) experience using Qsymia so far, more than half considered Qsymia to be the most efficacious weight-loss agent. Our specialists concurred with this opinion and were even more positive, with 68% considering Qsymia to produce the best weight loss among
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obesity therapies. A clear majority (near three fourths) of our specialists projected Qsymia to have a 60% market share relative to BELVIQ. 2) All three new obesity drugs will potentially share the obesity drug market. Assuming approval of Contrave and its availability along with Qsymia and BELVIQ, most PCP respondents in our survey feel that all three drugs will be used, though with an uneven allocation in the market. (And here, more expect Qsymia to have the advantage). Our specialists agree with this outlook. Like PCPs, specialists expect all three drugs to have some use in patients, while they too think that Qsymia will dominate overall. 3) Safety issues are not likely to stand in the way of obesity drug uptake. While physicians are familiar with potential safety issues of these new therapies, safety does not appear to present a major barrier to utilization. PCPs generally expressed moderate concern about specific risks potentially associated with Qsymia, BELVIQ, or Contrave, such as teratogenicity, serotonin syndrome, and cardiovascular concerns. However, only 30% viewed safety and tolerability issues as significant enough to prevent adoption. Specialists tended to be more even more comfortable, with fewer than 15% of respondents identifying a specific concern which would present a barrier to uptake of these respective drugs. 4) Cost and reimbursement are the key concerns weighing on physicians minds about these drugs. Both PCPs and specialists most frequently cited drug costs and lack of reimbursement as the most significant hurdles to wide use of the new anti-obesity agents. Most physicians in both groups remain relatively pessimistic about insurance coverage for these agents. Given cost concerns, when possible, both PCPs and specialists appear willing to use generic substitutions for branded agents. In our surveys, PCPs (76%) seemed more willing in this regard, but a significant proportion of specialists (58% and 54% regarding Qsymia and Contrave, respectively) also indicated comfort with prescribing generics.
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Survey Methodology
1) The Primary Care Physician (PCP) Survey
We surveyed 50 primary care physicians (PCP) across the United States. Given our view that the commercial success or failure of these new anti-obesity drugs will be determined by how well received and how widely prescribed they will be by the PCP community, we specifically wanted to gain insights into these non-specialist physicians views on these drugs. Therefore, in this survey, we sought the opinion of PCPs who did not consider themselves to be specialists in the treatment of obesity, and we pre-screened respondents using this criterion (see full questionnaire, including the four screening questions, at the back of this report). However, we did seek survey participants who were knowledgeable about the therapeutic area. Therefore, we also required respondents to be familiar with the efficacy and safety data from the clinical trials of Qsymia and BELVIQ. In addition, physicians needed to be willing to treat patients with these agents in their clinical practices. We received a total of 50 responses from PCPs meeting the screening criteria. The physicians were from diverse regions across the U.S., representing 28 states. The majority of respondents were either solo practitioners or based in group practices.
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62%
6%
0% 11-15
4%
16-20
0% 21-30
0% 31-49
0% >50
We asked the physicians who had not yet treated any patients with Qsymia to elaborate further and answer the Why not? question. A number of them expressed general cautiousness about the use of new drugs and tendency for slow uptake of medications with which they are not familiar. Others delineated issues with cost and availability of Qsymia. We have included all the individual answers we received in response to the Why not question in the next figure.
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Half of surveyed PCPs selected Qsymia as the most efficacious weight-loss drug
In my opinion, the anti-obesity drug that results in the most robust weight loss is:
60% 50% 52%
40%
30% 20% 18%
12%
0% Qsymia Belviq Contrave 2% Liraglutide 0% Empatic 2% Orlistat Phentermine 2% Other
12%
10%
0%
The PCPs in our survey favor Qsymia, but we also note that they generally consider weightloss drugs to potentially be efficacious for their patients. In response to our question about the anti-obesity drug with the best efficacy, only 12% of respondents indicated that none of the approved and investigational agents listed would result in meaningful weight loss.
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Most surveyed PCPs expect Qsymia to lead the market over BELVIQ: 62% for Qsymia lead vs. 10% for BELVIQ lead vs. 28% for a market split
One year after Belviqs launch, I would expect that Qsymia and Belviq will have split the anti -obesity market in the following way:
Qsymia 10%, Belviq 90% Qsymia 25%, Belviq 75% Qsymia 40%, Belviq 60% Qsymia 50%, Belviq 50% 2% 28% 0% 8%
24% 28%
25%
30%
Our PCPs will also use Contrave, if approved; however, Qsymia seems to be the agent of choice in our group of PCPs
With the potential approval of a third new weight-loss agent, Contrave, on the horizon, possibly sometime in 2014, we were interested to find out the PCP perspective on use of all three of these new drugs. We asked physicians to project to a time with full availability of all three drugs and to consider multiple market-split scenarios. 12% voted for an even split among the three drugs One-fourth of the PCPs voted for the one-drug-really-dominates-the-market scenario, or the 80/10/10 split, and Qsymia dominated the vote there with 18%, vs. just 4% and 2% for BELVIQ and Contrave, respectively. Similarly, approximately half of the PCPs (52%) voted for scenarios of one dominant drug in the market, i.e. the 60/20/20 or the 80/10/10 splits. Again, Qsymia was the clear winner here, with 38% vs. 10% and 4% for BELVIQ and Contrave, respectively. However, a third of our PCPs expect two agents to share the lead position in the market (40% each). Again, Qsymia was more often the drug included as one of the two leads (26% of votes). That does show that our physicians believe there is room for multiple drugs to be used in this space, possibly reflecting the fact that there are several patient types that may benefit from different characteristics of each agent.
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Surveyed PCPs view Qsymia as the dominant one, but expect to use of all three new weight-loss agents
Assuming Contrave is approved, 18-24 months from its launch, I believe the obesity drug market will be split in the following way:
Other market split Qsymia 33%, Belviq 33%, Contrave 33% Contrave 40%, Qsymia 40%, Belviq 20% 10% 8% 16% 2% 12%
Belviq 40%, Contrave 40%, Qsymia 20% Qsymia 40%, Belviq 40%, Contrave 20%
Contrave 60%, Qsymia 20%, Belviq 20% Belviq 60%, Qsymia 20%, Contrave 20% Qsymia 60%, Belviq 20%, Contrave 20% Contrave 80%, Qsymia 10%, Belviq 10% Belviq 80%, Qsymia 10%, Contrave 10% Qsymia 80%, Belviq 10%, Contrave 10% 0% 5% 2% 4%
2% 6%
20%
What about treatment duration? PCPs much more optimistic (out of touch?) than in recent history
Again focusing on the two newly approved weight-loss drugs, we asked our PCPs to indicate the anticipated average duration of therapy on either Qsymia or BELVIQ for their patients. 78% of the physicians expected the treatment duration to be 5 months or longer, including 38% who expected an average patient would remain on therapy for close to a year (10-12 months) or longer than a year. This assessment by PCPs may be a too optimistic outlook and expectation for these drugs, in the context of a therapy category with poor patient adherence in the longterm historically. In recent investor calls, Vivus management has indicated that Qsymias persistence rate, which could be a surrogate for treatment duration, was approximately 3.4 months. In our survey, only 22% of the PCPs expected the average treatment duration to be between 0-4 months.
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36%
35%
30% 25% 20% 20% 20% 18%
15%
10% 5% 0% 0-2 months 3-4 months 5-6 months 7-9 months 10-12 months >12 months 2% 4% 0% Other
What about safety? They all have their issues, and none of them really stand out
Safety issues have caused a troubled history for weight-loss agents and resulted in the withdrawal of multiple drugs from the U.S. market. Prior to the approvals of BELVIQ and Qsymia in June and July 2012, respectively, these withdrawals had left orlistat as the only prescription drug approved for the long-term treatment of obesity. We sought to ascertain how safety concerns might impact our physicians utilization of the new anti -obesity drugs. In our survey, we asked respondents to choose the drug with the best safety profile from a list which included approved agents (Qsymia, BELVIQ, orlistat, phentermine) and agents under investigation (Contrave, Empatic, liraglutide). The answers we received show that no agent was singled out by physicians with regard to safety, and indeed the responses were fairly evenly distributed among the approved agents. Interestingly, Contrave and Empatic received zero votes from our PCPs as the safest choice, while one-fifth of our respondents indicated that safety and tolerability concerns of the listed weight-loss drugs would prevent clinical use in patients.
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PCPs in our survey didnt differentiate any obesity drug as safer than the others
The obesity drug with the cleanest safety and tolerability profile is:
25% 20% 15% 10% 5% 4% 0% Qsymia Belviq Contrave Liraglutide 0% Empatic Orlistat Phentermine 2% Other I believe that the safety and tolerability profile of these agents would likely prevent me from using them in most of my patients 20% 16% 16% 22% 20%
0%
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The mean comfort level for 5 out of the 6 patient types we asked about ranged from 3.1 to 3.4. Thus, our PCPs generally had fairly neutral comfort levels (with a trend toward less comfort) for prescribing the respective agents in the patient types which highlighted specific safety concerns. The highest level of discomfort was noted for prescribing Qsymia to women of childbearing age, with a mean 3.7 comfort level rating. This is not surprising, given that teratogenic risk is a main focus of the current Qsymia REMS program. Surveyed PCPs had generally neutral comfort levels with potential safety concerns
Level of comfort around the following factors pertaining to use of anti-obesity agents on a scale of 1-5 (1=very comfortable, 5=not comfortable)
Prescribing Belviq to patients with increased malignancy risk Prescribing Belviq to patients at increased CV risk Prescribing Belviq to patients taking SSRIs Prescribing Contrave to patients at increased CV risk 3.12 3.36 3.36 3.42 3.44
Prescribing Qsymia to patients at increased CV risk Prescribing Qsymia to women of child-bearing age 0 1 2 3
3.7 4 5
While the obesity pharmacotherapy space has had a very difficult history from a safety standpoint, when looking at these data and in combination with the answer to the previous question on safety, in which for 80% of our surveyed PCPs, safety and tolerability concerns would not prevent clinical use of various weight-loss drugs, our conclusion from this specific survey would have to be that the safety profiles of the new anti-obesity therapies would not present major barriers to physician uptake among PCPs.
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of generic components of the branded products (Qsymia and Contrave), and none of the physicians in our survey selected reasons other than those listed. In our survey, PCPs selected cost/lack of reimbursement as most significant hurdle to adoption of new weight-loss drugs
In my view, the biggest hurdle to Qsymia, Belviq, and Contraves wide adoption will be:
2%
0% 4% 10% 30% Patient disappointment with the small amount of weight loss and the resulting lack of motivation to continue treatment Competition from off-label use of generic phentermine/topiramate and bupropion/naltrexone I dont expect any big hurdles; I think Qsymia, Belviq, and Contrave will be widely prescribed 54% Cost/lack of reimbursement Concerns over safety and/or tolerability
Other hurdles
With third-party payers historically reluctant to pay for obesity pharmacotherapy, lack of reimbursement for obesity drugs has been a common issue, until the progress achieved recently. We polled our PCPs on their expectations for insurance coverage of the approved agents Qsymia and BELVIQ in the future, two to three years following their market entries, asking them to estimate what percentage of insurers will provide prescription coverage. Most of our physicians were not optimistic about the prospects for coverage of these drugs. Only 20% of the group believed that 50% of insurers would cover obesity drugs in that time frame. In fact, a 62% majority of PCPs in our survey forecasted that less than 30% of insurance companies would reimburse these drugs approximately 2-3 years after their launches. Majority of surveyed PCPs pessimistic about insurance coverage
What percentage of insurers do you expect will cover Qsymia and Belviq approximately 23 years after their launch:
100% 90-99% 80-89% 0% 2% 0% 14% 2% 16% 18% 20% 24% 0% 4%
70-79%
60-69% 50-59% 40-49% 30-39% 20-29% 10-19% Less than 10%
0%
5%
10%
15%
20%
25%
30%
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to concerns about dosing equivalence and off-label prescribing, as we would expect. We have provided the answers we received to this question in the next table. Surveyed PCPs unwilling to use generics cite off-label and equivalence concerns
PCP Reasons for Not Using Generics I don't prescribe phentermine; I also suspect the 2 meds separate will still be expensive anyway It's not approved Dosages may be different Not FDA approved Not clear on the long-term side-effects of these combination products To my knowledge, the generic phentermine does not come in the equivalent dose alone Dosing/strength The studies showing safety and efficacy were done with the combination [branded product]
Source: Cowen and Company, Epocrates
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Two thirds of obesity specialists view Qsymia as the most efficacious agent
By a very wide margin, 68% vs. 4% for the next highest drug, our specialists selected Qsymia as the drug resulting in the greatest weight loss. Notably, none of the obesity specialists we surveyed selected BELVIQ. All other agents on our list received a very small number of votes, ranging from 2% to 4%. Thus, it is very clear that among this specialist group of prescribers, Qsymia is considered to be, by far, the most efficacious agent. In our survey, most obesity specialists consider Qsymia as the most efficacious agent
The obesity drug that results in the most robust weight loss is:
80% 70% 60% 50% 40% 30% 20% 10% 0% 68%
18% 0%
Qsymia Belviq
4%
Contrave
4%
Liraglutide
4%
Empatic
2%
Orlistat None of these drugs result in what I consider meaningful weight loss
We further asked our specialists to predict the relative market share of the two newly approved weight-loss agents, Qsymia and BELVIQ, in order to further gauge perceptions on relative efficacy and measure relative potential utilization. When asked to project to 18-24 months after their launches, 3/4 of our specialists (74%) viewed Qsymia as the dominant drug in the market over BELVIQ, with 60% or greater share. In addition, only 4% of the respondents in our survey selected BELVIQ as the market leader over Qsymia, with 60% or higher market share. Finally, 22% of the physicians we surveyed projected a 50-50 split between the two agents.
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74% of obesity specialists pick Qsymia to be the market leader; only 4% pick BELVIQ
18-24 months after their launch, I believe that Qsymia and Belviq will have split the market in the following way:
Qsymia 10%, Belviq 90%
Qsymia 25%, Belviq 75% Qsymia 40%, Belviq 60%
0%
5%
10%
15%
20%
25%
30%
35%
40%
While our specialists were clearly not impressed with the weight-loss efficacy of BELVIQ, it is worth examining whether they may view it as a safer replacement for fenfluramine. Given the notorious history of the fenfluramine-phentermine combination, the popular and effective Fenphen, eventually withdrawn from the market because of cardiac valvulopathy risk, and the greater serotonin receptor selectivity of BELVIQ, some clinicians may view one potential use of BELVIQ to be in combination with phentermine. We asked our specialists about their possible use of this combination. Only one fourth of the obesity specialists in our survey answered that they would use the BELVIQ-Phentermine combination right now. The remaining three fourths stated that they would not utilize it, most often (54%) because of lack of clinical trial data, with the next most common reason (14%) being lack of FDA approval for this combination. It is therefore clear that, until clinical trial data and/or FDA approval of this combination, the vast majority of obesity specialists would be unwilling to use this potentially promising combination off-label. Majority of specialists in our survey would not use BELVIQ-Phentermine now
I would be willing to treat my patients with Belviq in combination with phentermine to help them achieve more robust weight loss:
60% 50% 40% 30% 20% 10% 0%
Yes No, I dont believe the addition of No, because we have not yet No, because the combination is not FDA-approved phentermine can significantly seen clinical trial data with the add to the weight loss seen with Belviq + phentermine combination Belviq alone
54%
26%
14%
6%
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Specialists are open to trying multiple agentsbut it seems like Qsymia will get the first script
Not surprisingly, the majority of our obesity specialists believe in the use of pharmacotherapy for the treatment of obesity. In our earlier question concerning the most efficacious obesity therapy, only 9 respondents (18%) stated than none of the listed drugs result in meaningful weight loss. Despite their clear distinction of Qsymia as the most efficacious anti-obesity therapy, most of our specialists appear willing to embrace multiple options. We asked our physicians about how they might use Qsymia and BELVIQ in practice. Half of the group indicated willingness to try both agents in sequence, should a patient lack response to the first agent, without specifying which agent would be used upfront. Still, Qsymia seems to be the agent of choice, when a drug is selected by name: 38% expect to use Qsymia first, while only 6% expect to start first with BELVIQ. Finally, a 10% minority of specialists expected to utilize only one agent, and only 4% indicated that neither drug would be used. Vast majority of surveyed specialists expect to use both Qsymia and BELVIQbut Qsymia is the preferred agent when docs do select one
The following statement best describes my expectation for my use of Qsymia and Belviq:
I wont use either of these drugs I will try one of the two first, if the patient doesnt respond, I wont try the other one
4% 2% 50% 0% 8%
I will try one of the two first, if the patient doesnt respond, I will then try the other one I will try Belviq first, if the patient doesnt respond, I wont try Qsymia
I will try Qsymia first, if the patient doesnt respond, I wont try Belviq I will try Belviq first, if the patient doesnt respond, I will then try Qsymia
6%
30% 0% 10% 20% 30% 40% 50% 60%
I will try Qsymia first, if the patient doesnt respond, I will then try Belviq
We further polled our specialists about their views on two drugs under investigation for obesity treatment, Novo Nordisks injectable GLP-1 receptor agonist Victoza (liraglutide), already approved for the treatment of Type 2 diabetes in the EU and the US, and Orexigens Empatic (bupropion/zonisamide). Concerning both agents, the physicians in our survey tended to have a fairly positive outlook. The majority of respondents for questions on both agents (76% and 66%, respectively) considered the drugs to be either incremental improvements compared to currently available therapies, or very promising anti-obesity agents. For both drugs, 20% of respondents voted that they had low expectations for these agents. In Victozas case, a third of respondents (32%) viewed the drug as very promising, while 44% viewed it as an incremental improvement over existing therapies.
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4%
A very promising anti-obesity An incremental improvement I have very low expectations agent over currently available for this agent therapies I dont have an opinion
In Empatics case, a fourth of respondents (26%) viewed the drug as very promising, while 40% viewed it as an incremental improvement over existing therapies. When looking at the survey results for these two agents, it is worth remembering a number of differences, including that 1) Victoza has already produced Phase III data, while Empatic has only been tested in two Phase II studies, 2) Victoza is an injectable, while Empatic is an oral, and 3) physicians have clinical experience with Victoza, since it has been on the US market since its 2009 approval for diabetes, while Empatic is still an investigational agent, which may partially account for the lower percentage of votes for it as a very promising agent, compared with Victoza. On the other hand, even if a physician in our survey was not familiar with the Empatic Phase II dataset, Empatics individual drug components, bupropion and zonisamide, are used by US physicians, (bupropion a lot more often than zonisamide, of course), and thus the idea of using that drug combination should not be completely unfamiliar to obesity specialists. Specialists view Empatic as very promising (26%) or as incremental (40%)
What is your view of Orexigens Empatic (buprorion/zonisamide) which was tested in two Phase II trials for the treatment of obesity?
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 40% 26% 20% 14%
A very promising anti-obesity An incremental improvement I have very low expectations agent over currently available for this agent therapies
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Focusing on more near-term development, we asked our obesity specialists to evaluate a future market with availability of Qsymia, BELVIQ, and an approved Contrave, in order to project respective market shares for these products. The answers to this question, once again, pointed to two conclusions: 1) physicians will utilize more than one of these anti-obesity agents, and 2) Qsymia seems, once again, to be the agent of choice. Here is a summary of the data: 90% of the votes went to scenarios in which there is room for all three drugs to gain at least 20% market share; only 10% of the physicians voted for the scenario that one drug (in that case, it was Qsymia) gains 80% market share, while the other two have only 10% each. All other votes went to scenarios in which there is a dominant player (40-60% market share), but there was 40-60% of the market left for the other two, indicating that physicians believe that the market will accommodate multiple drugs. 40% of the votes went to scenarios in which Qsymia is the dominant drug in the market, i.e. having 80% market share (10% of the vote) or 60% market share (30% of the vote). The corresponding scenarios for BELVIQ and Contrave only received 4% of the votes each. In addition, 54% of the votes went to scenarios in which Qsymia would get 40% or higher market share. The corresponding scenarios for BELVIQ and Contrave received 6% and 24% of the votes, respectively. Eight out of the fifty respondents (16%) indicated that the market would be split equally among the three drugs.
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Surveyed specialists expect use of Qsymia, BELVIQ, and Contrave in the market
Assuming Contrave is approved, 18-24 months from its launch, I believe the obesity drug market will be split in the following way:
Contrave 80%, Qsymia 10%, Belviq 10% Belviq 80%, Qsymia 10%, Contrave 10% Qsymia 80%, Belviq 10%, Contrave 10% Contrave 60%, Qsymia 20%, Belviq 20% Belviq 60%, Qsymia 20%, Contrave 20% Qsymia 60%, Belviq 20%, Contrave 20% Contrave 40%, Qsymia 40%, Belviq 20% Belviq 40%, Contrave 40%, Qsymia 20% Qsymia 40%, Belviq 40%, Contrave 20% Qsymia 33%, Belviq 33%, Contrave 33%
0%
0%
10%
4%
4% 30% 20% 2% 14% 16%
0%
Source: Cowen and Company, SurveyMonkey
5%
10%
15%
20%
25%
30%
35%
Another way to look at these data is that more than one-third of the respondents forecasted a market with two agents having equal lead shares of 40% each, most often with Qsymia being one of the two leaders (34% of votes). Otherwise, the most votes (30%) were allocated to a scenario with Qsymia holding 60% of the market and the two other agents dividing the remaining share equally. With these market allocations, physicians in our survey have accounted for some degree of utilization of all three agents, albeit often disproportionate. We believe our specialists are recognizing the heterogeneous nature of obesity and considering the potential variability of therapeutic responses with different drugs in individual patients. These results reiterate for us that 1) Qsymia seems to be the dominant drug in the space, and 2) there is indeed room for multiple anti-obesity agents in clinical practice.
Specialists seem comfortable dealing with these drugs potential safety issues
We asked our specialists to select the obesity agent with the best safety and tolerability profile. The results did not distinguish any one specific agent as the safest, and votes were almost evenly distributed among currently approved obesity agents and liraglutide, which is approved for Type 2 diabetes treatment. We believe this fairly uniform split in votes demonstrates that our physicians recognize potential safety issues with all the weight-loss therapies which they may use. Notably, only 3 out of the 50 respondents (6%) indicated that safety concerns associated with these agents would prevent their clinical use. Clearly, the vast majority of obesity specialists in our survey seem comfortable with management of any potential safety or tolerability issues, and have concluded that the benefits provided by these therapies outweigh possible risks.
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Specialists in our survey did not distinguish any one weight-loss drug as the safest
The obesity drug with the best safety and tolerability profile is:
30% 25% 20% 15% 20% 22%
24%
18%
10%
5% 0%
Qsymia Belviq
10%
6% 0%
Contrave Liraglutide Empatic Orlistat I believe that the safety and tolerability profile of these agents is such that I would probably not use them in most of my patients
In our survey, we took the opportunity to gain insight into our obesity specialists perspectives on specific safety concerns that have been associated with the approved agents Qsymia and BELVIQ. We referred to these concerns and rated comfort with prescribing of a particular agent in a clinical scenario, according to four levels: 1) very comfortable; 2) comfortable, but with precautions; 3) somewhat comfortable, limiting prescribing to a small group of patients; and 4) not comfortable, with no prescribing. For Qsymia, we asked about prescribing to women of child-bearing age and to patients at increased cardiovascular risk, in order to elicit reactions to the risks of teratogenicity and elevated heart rate, respectively. In both Qsymia scenarios, the majority of our respondents (66% with regard to teratogenic risk and 62% for CV risk) rated themselves in one of the two highest comfort levels. Specialists comfortable prescribing Qsymia to younger women
How comfortable would you be prescribing Qsymia to women of child-bearing age?
60% 50% 40% 30% 20% 10% 0%
Very comfortable, I trust my patients to not take Qsymia once they realize theyre pregnant Comfortable, but I would Somewhat comfortable, I Not comfortable, I would not closely monitor and remind would only prescribe it to a prescribe Qsymia to women of the patient every month small fraction of these patients child-bearing age
54%
26%
12% 8%
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22%
16%
Very comfortable
Comfortable, but would Somewhat comfortable, I closely monitor and warn the would only prescribe it in a patient and would ask them to small fraction of these discuss with their cardiologist patients before or after starting on Qsymia
For BELVIQ, we queried on prescribing to patients taking SSRIs and to patients at increased cardiovascular risk, referring to serotonergic risk/serotonin syndrome and cardiac valvulopathy, respectively. In the case of patients taking SSRIs, 56% of our specialists indicated the two lowest comfort levels for prescribing BELVIQ, with approximately one-third signifying intention to limit prescribing for such patients, and about one-quarter not prescribing in this scenario. Another approximately one-third of the group was comfortable prescribing BELVIQ to patients taking SSRIs, with close monitoring and discussion. On the other hand, with regard to CV risk, most physicians (64%) indicated the two highest comfort levels for prescribing BELVIQ in this case. Some discomfort prescribing BELVIQ to patients on SSRIs
How comfortable would you be prescribing Belviq to patients taking SSRIs?
Not comfortable, I would not prescribe Belviq to this group of patients Somewhat comfortable, I would only prescribe to a small fraction of these patients Comfortable, but I would closely monitor and warn the patient
24%
32%
32%
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8%
Very comfortable
Comfortable, but would closely Somewhat comfortable, I would monitor and warn the patient and only prescribe in a small fraction would ask them to discuss this of these patients with their cardiologist before or after starting on Belviq
We also were interested in gauging reaction to signals of tumorigenicity and cardiac valvulopathy in BELVIQs preclinical dataset. Our specialists were asked to rate their levels of concern resulting from these data. 62% of physicians indicated some concern, but no impediment to use of BELVIQ, based on risk-benefit assessment, with another 16% of the group expressing no concern. Therefore, it appears that more than three fourths of our physicians would not limit their use of BELVIQ based on these issues. Most specialists not significantly concerned by BELVIQ preclinical safety signals
How concerned are you about the rat carcinogenicity and potential valvulopathy data observed in Belviqs preclinical studies?
70%
60% 50% 40%
62%
30%
20% 10% 0% 4%
18%
16%
Very concerned, I will not Concerned, and I will only Somewhat concerned, but the prescribe Belviq to my patients prescribe Belviq to a small % of risk/reward makes sense to me my patients and I will use Belviq in quite a few of my patients
With respect to impressions of Contraves cardiovascular safety, we polled the obesity specialist group on the probability of success for the Light Study, Contraves Cardiovascular Outcomes Study (CVOT). The trials primary endpoint is time to the first confirmed occurrence of major adverse cardiovascular events (MACE), defined as cardiovascular death, non-fatal myocardial infarction, and non-fatal stroke. Ultimately, the goal of the study is to demonstrate non-inferior CV safety of Contrave compared to placebo in patients with moderate CV risk. Sixty-two percent of our specialists estimated the probability of success to be 50% or greater,
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with most within this segment (40%) being very optimistic and indicating a 75% or greater chance of success. Majority of specialists in our survey predict 50% probability of success for Contraves CVOT
The probability that Contraves cardiovascular outcomes LIGHT trial succeeds is approximately:
30% 25% 20% 16% 22% 28%
20%
15% 10% 5% 0%
10%
12%
2%
20% 30% 50% 75% 90+%
Therefore, with the exception of serotonergic risk concerns regarding the use of BELVIQ in patients taking SSRIs, most obesity specialists surveyed appear to have a relatively high comfort level with possible safety issues of Qsymia and BELVIQ, as well as optimism about CV safety with Contrave. Given these data, it appears that most obesity specialists are comfortable with the safety profiles, and satisfied with the risk-benefit ratios, of these new antiobesity agents.
Obesity specialists see cost/reimbursement as the biggest issue for these drugs
In order to better understand the potential barriers to adoption of Qsymia, BELVIQ, and Contrave from the point of view of obesity specialists, we surveyed our physicians on the issues which may prevent uptake for each of the three drugs individually. Only a small minority of the group (2%-8% across the questions about the three agents) indicated that there would be no potential hurdles to widespread prescribing for any of the drugs. In the case of each new anti-obesity agent, the greatest number of respondents (56% for Qsymia, 52% for BELVIQ, and 48% for Contrave) voted for cost/lack of reimbursement as the primary issue preventing wide adoption. This concern outweighed the others listed, including: 1) specific safety concerns; 2) competition from the other new anti-obesity agents; 3) lack of efficacy and subsequent patient disappointment; and 4) competition from generic substitution, in the cases of Qsymia and Contrave. For Qsymia, the next most identified barrier (20%) was competition from off-label generic substitution, while for BELVIQ, competition from Qsymia was the second greatest barrier (22%). In the case of Contrave, the next most identified barrier (18%) was patient disappointment with amount of weight loss.
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56% of specialists identify cost/lack of reimbursement as biggest hurdle to Qsymias wide adoption
In my view, the biggest hurdle to Qsymias wide adoption will be:
10%
6%
I dont expect any big hurdles; I think Qsymia will be very widely prescribed Cost/lack of reimbursement
20%
Concerns about teratogenicity Concerns about heart rate increase Competition from Belviq
2% 0% 6% 56%
Competition from off-label use of generic phentermine/topiramate Patients wont lose much weight, will be disappointed and discontinue treatment
52% of specialists identify cost/lack of reimbursement as biggest hurdle to BELVIQs wide adoption
In my view, the biggest hurdle to Belviqs wide adoption will be:
8% 22% I dont expect any big hurdles; I think Belviq will be very widely prescribed Cost/lack of reimbursement Concerns about valvulopathy
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48% of specialists identify cost/lack of reimbursement as biggest hurdle to Contraves wide adoption
Assuming it is approved, the biggest hurdle to Contraves wide adoption will be:
2% 18% I dont expect any big hurdles; I think Contrave will be very widely prescribed
Cost/lack of reimbursement
12%
Competition from off-label use of bupropion and naltrexone 12% Safety concerns
0%
We also asked our specialists about their expectations for future insurance coverage of Qsymia and BELVIQ. One-third of the specialists we surveyed predicted that half of all insurers would provide prescription coverage for these drugs, while another 18% was even more optimistic, expecting 70% or higher coverage. However, almost 50% of our specialists expected only one-third or less of insurers to reimburse these drugs. Our specialists slightly pessimistic about future insurance coverage
I believe that 2-3 years after their launch, _____ of insurers will cover Qsymia and Belviq:
40%
35% 30%
25% 20% 15% 10% 5% 16.0% 18.0% 14.0%
34.0%
8.0%
6.0%
4.0% 100%
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In light of the potential cost and reimbursement issues associated with new weight-loss drugs, we set out to assess our specialists perspectives on substituting the branded drug with its individual components, which are available as generics, focusing on Qsymia and Contrave. We asked about their willingness to use generic phentermine/topiramate or bupropion/naltrexone, in the context of patient requests driven by cost concerns. Respondents unwilling to prescribe generic combinations indicated whether legal liability issues or concerns about accurate generic titration motivated this decision. In both the Qsymia and Contrave scenarios, the majority of respondents, 58% and 54%, respectively, indicated willingness to utilize the offlabel generic combinations. A higher proportion of specialists had legal liability concerns with generic substitution for Contrave (30%) compared to Qsymia (20%). This difference may result from the fact that phentermine is an approved weight-loss drug, although for short term use. Most obesity specialists may likely have more experience using phentermine compared with bupropion/naltrexone in the context of weight-loss therapy, and this may account for more comfort, from a liability standpoint, using a phentermine-based generic combination. More physicians were concerned about the accuracy of generic titration and subsequent efficacy/tolerability effects with generic replacement of Qsymia (22%) compared to Contrave (16%). More than half the specialists in our survey willing to use the individual generic components of Qsymia
To a motivated patient that I think could benefit from Qsymia, but could not afford it and would ask if I could please help them by prescribing generic phentermine and topiramate instead, my answer would be:
70% 60% 50% 40% 30% 20% 10% 0% 58.0%
More than half the specialists in our survey willing to use the individual generic components of Contrave
To a motivated patient that I think could benefit from Contrave (when/if it is approved), but could not afford it and would ask if I could please help them by prescribing generic bupropion and naltrexone instead, my answer would be:
60% 50% 54.0% 30.0%
20.0%
22.0%
OK, will do it
No, Im afraid I cant, due to the legal No, Im afraid I cant, its too liability of using these two generics complicated to accurately titrate the off-label when theres a branded two generics and still get the same drug on the market efficacy and tolerability that youd get with Qsymia
16.0%
No, Im afraid I cant, due to the legal No, Im afraid I cant, because its liability of using these two generics too complicated to accurately titrate off-label when theres a branded the two generics and still get the drug on the market same efficacy and tolerability that youd get with Contrave
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approval in clinical practice, but both groups consider Qsymia to produce the most robust weight loss and project Qsymia to be the obesity pharmacotherapy market leader. Obesity specialists are even more positive about Qsymia than PCPs. 2. There is room for multiple weight-loss drugs in clinical practice. PCPs and obesity specialists are very aligned on the fact that one treatment does not fit all obese patients. Assuming Contrave approval, they agree that Qsymia, BELVIQ, and Contrave will all be used to some extent for obesity treatment. Safety concerns will not significantly prevent use of anti-obesity agents. Obesity specialists are generally more comfortable with the specific safety issues that may be associated with these drugs. However, both groups do not consider safety to be the major barrier preventing utilization of these therapies. Drug cost and lack of reimbursement are viewed as the major barriers to adoption. PCPs and obesity specialists identify therapy cost concerns and lack of insurance coverage as the primary hurdles to widespread uptake of anti-obesity drugs. Both groups appear relatively willing to use the individual generic components of branded drugs off-label in order to help patients with cost concerns. Interestingly, and somewhat surprisingly, PCPs appear even more willing than specialists to prescribe such generic replacements.
3.
4.
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2.
3.
4.
5.
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6.
Please rate your level of comfort around the following factors pertaining to your use of anti-obesity agents on a scale of 1-5 (1=very comfortable, 5=not comfortable) 1. Prescribing Qsymia to women of child-bearing age (mean 3.7) 2. Prescribing Qsymia to patients at increased CV risk (mean 3.44) 3. Prescribing BELVIQ to patients taking SSRIs (mean 3.36) 4. Prescribing BELVIQ to patients at increased CV risk (mean 3.36) 5. Prescribing BELVIQ to patients with increased malignancy risk (mean 3.12) 6. Prescribing Contrave to patients at increased CV risk (mean 3.42) For a motivated patient who may benefit from Qsymia or Contrave but is concerned about drug cost and is asking for treatment with generic phentermine/topiramate or bupropion/naltrexone instead, my answer would be: 1. Yes, I will prescribe the generic combination (76%) 2. No, I will not prescribe the generic combination because. (24%) Please provide your reasoning In my view, the biggest hurdle to Qsymia, BELVIQ, and Contraves wide adoption will be: 1. Concerns over safety and/or tolerability (30%) 2. Cost/lack of reimbursement (54%) 3. Patient disappointment with the small amount of weight loss and the resulting lack of motivation to continue treatment (10%) 4. Competition from off-label use of generic phentermine/topiramate and bupropion/naltrexone (2%) 5. I dont expect any big hurdles; I think Qsymia, BELVIQ, and Contrave will be widely prescribed (4%) 6. Other hurdles (0%) Assuming Contrave is approved, 18-24 months from its launch, I believe the obesity drug market will be split in the following way: 1. Qsymia 80%, BELVIQ 10%, Contrave 10% (18%) 2. BELVIQ 80%, Qsymia 10%, Contrave 10% (4%) 3. Contrave 80%, Qsymia 10%, BELVIQ 10% (2%) 4. Qsymia 60%, BELVIQ 20%, Contrave 20% (20%) 5. BELVIQ 60%, Qsymia 20%, Contrave 20% (6%) 6. Contrave 60%, Qsymia 20%, BELVIQ 20% (2%) 7. Qsymia 40%, BELVIQ 40%, Contrave 20% (16%) 8. BELVIQ 40%, Contrave 40%, Qsymia 20% (8%) 9. Contrave 40%, Qsymia 40%, BELVIQ 20% (10%) 10. Qsymia 33%, BELVIQ 33%, Contrave 33% (12%) 11. Other market split (2%)
7.
8.
9.
10. What percentage of insurers do you expect will cover Qsymia and BELVIQ approximately 2-3 years after their launch:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
Less than 10% (24%) 10-19% (20%) 20-29% (18%) 30-39% (16%) 40-49% (2%) 50-59% (14%) 60-69% (0%) 70-79% (2%) 80-89% (0%) 90-99% (4%) 100% (0%)
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2.
3.
4.
5.
6.
7.
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2. 3. 4. 8.
Comfortable, but I would closely monitor and warn the patient (32%) Somewhat comfortable, I would only prescribe to a small fraction of these patients (32%) Not comfortable, I would not prescribe BELVIQ to this group of patients (24%)
How comfortable would you be prescribing BELVIQ to patients at increased CV risk? 1. Very comfortable (36%) 2. Comfortable, but would closely monitor and warn the patient and would ask them to discuss this with their cardiologist before or after starting on BELVIQ (28%) 3. Somewhat comfortable, I would only prescribe in a small fraction of these patients (28%) 4. Not comfortable, I would not prescribe to this group of patients (8%) How concerned are you about the rat carcinogenicity and potential valvulopathy data observed in BELVIQs preclinical studies? 1. Very concerned, I will not prescribe BELVIQ to my patients (4%) 2. Concerned, and I will only prescribe BELVIQ to a small % of my patients (18%) 3. Somewhat concerned, but the risk/reward makes sense to me and I will use BELVIQ in quite a few of my patients (62%) 4. Not concerned at all, Ill use BELVIQ to many of my patients (16%)
9.
10. I would be willing to treat my patients with BELVIQ in combination with phentermine to help them achieve more robust weight loss: 1. Yes (26%) 2. No, I dont believe the addition of phentermine can significantly add to the weight loss seen with BELVIQ alone (6%) 3. No, because we have not yet seen clinical trial data with the BELVIQ + phentermine combination (54%) 4. No, because the combination is not FDA-approved (14%) 11. The following statement best describes my expectation for my use of Qsymia and BELVIQ: 1. I will try Qsymia first, if the patient doesnt respond, I will then try BELVIQ (30%) 2. I will try BELVIQ first, if the patient doesnt respond, I will then try Qsymia (6%) 3. I will try Qsymia first, if the patient doesnt respond, I wont try BELVIQ (8%) 4. I will try BELVIQ first, if the patient doesnt respond, I wont try Qsymia (0%) 5. I will try one of the two first, if the patient doesnt respond, I will then try the other one (50%) 6. I will try one of the two first, if the patient doesnt respond, I wont try the other one (2%) 7. I wont use either of these drugs (4%) 12. 18-24 months after their launch, I believe that Qsymia and BELVIQ will have split the market in the following way: 1. Qsymia 90%, BELVIQ 10% (4%) 2. Qsymia 75%, BELVIQ 25% (36%) 3. Qsymia 60%, BELVIQ 40% (34%) 4. Qsymia 50%, BELVIQ 50% (22%) 5. Qsymia 40%, BELVIQ 60% (2%) 6. Qsymia 25%, BELVIQ 75% (2%) 7. Qsymia 10%, BELVIQ 90% (0%) 13. The obesity drug that results in the most robust weight loss is: 1. Qsymia (68%) 2. BELVIQ (0%) 3. Contrave (4%) 4. Liraglutide (4%) 5. Empatic (4%) 6. Orlistat (2%) 7. None of these drugs result in what I consider meaningful weight loss (18%)
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14. The obesity drug with the best safety and tolerability profile is: 1. Qsymia (20%) 2. BELVIQ (22%) 3. Contrave (10%) 4. Liraglutide (24%) 5. Empatic (0%) 6. Orlistat (18%) 7. I believe that the safety and tolerability profile of these agents is such that I would probably not use them in most of my patients (6%) 15. The probability that Contraves cardiovascular outcomes LIGHT trial succeeds is approximately: 1. 10% (2%) 2. 20% (20%) 3. 30% (16%) 4. 50% (22%) 5. 75% (28%) 6. 90+% (12%) 16. Assuming it is approved, the biggest hurdle to Contraves wide adoption will be: 1. I dont expect any big hurdles; I think Contrave will be very widely prescribed (2%) 2. Cost/lack of reimbursement (48%) 3. Competition from Qsymia (12%) 4. Competition from BELVIQ (0%) 5. Competition from off-label use of bupropion and naltrexone (12%) 6. Safety concerns (8%) 7. Patients wont lose much weight, will be disappointed and discontinue treatment (18%) 17. To a motivated patient that I think could benefit from Contrave (when/if it is approved), but could not afford it and would ask if I could please help them by prescribing generic bupropion and naltrexone instead, my answer would be: 1. OK, will do it (54%) 2. No, Im afraid I cant, due to the legal liability of using these two generics off-label when theres a branded drug on the market (30%) 3. No, Im afraid I cant, because its too complicated to accurately titrate the two generics and still get the same efficacy and tolerability that youd get with Contrave (16%) 18. Assuming Contrave is approved, 18-24 months from its launch, I believe the obesity drug market will be split in the following way: 1. Qsymia 33%, BELVIQ 33%, Contrave 33% (16%) 2. Qsymia 40%, BELVIQ 40%, Contrave 20% (14%) 3. BELVIQ 40%, Contrave 40%, Qsymia 20% (2%) 4. Contrave 40%, Qsymia 40%, BELVIQ 20% (20%) 5. Qsymia 60%, BELVIQ 20%, Contrave 20% (30%) 6. BELVIQ 60%, Qsymia 20%, Contrave 20% (4%) 7. Contrave 60%, Qsymia 20%, BELVIQ 20% (4%) 8. Qsymia 80%, BELVIQ 10%, Contrave 10% (10%) 9. BELVIQ 80%, Qsymia 10%, Contrave 10% (0%) 10. Contrave 80%, Qsymia 10%, BELVIQ 10% (0%) 19. What is your view of Novo Nordisks Victoza (liraglutide), which is already approved for diabetes and is currently in Phase III development for the treatment of obesity?
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1. 2. 3. 4.
A very promising anti-obesity agent (32%) An incremental improvement over currently available therapies (44%) I have very low expectations for this agent (20%) I dont have an opinion (4%)
20. What is your view of Orexigens Empatic (buprorion/zonisamide) which was tested in two Phase II trials for t he treatment of obesity? 1. A very promising anti-obesity agent (26%) 2. An incremental improvement over currently available therapies (40%) 3. I have very low expectations for this agent (20%) 4. I dont have an opinion (14%)
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Investment Risks
Biotechnology: There are multiple risks that are inherent with an investment in the biotechnology sector. Beyond systemic risk, there is also clinical, regulatory, and commercial risk. Additionally, biotechnology companies require significant amounts of capital in order to develop their clinical programs. The capitalraising environment is always changing and there is risk that necessary capital to complete development may not be readily available.
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Addendum
STOCKS MENTIONED IN IMPORTANT DISCLOSURES
Ticker ARNA OREX VVUS Company Name Arena Pharmaceuticals Orexigen Therapeutics Vivus
Analyst Certification
Each author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her personal views about any and all of the subject securities or issuers, and (ii) no part of his or her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report.
Important Disclosures
Cowen and Company, LLC and or its affiliates make a market in the stock of Arena Pharmaceuticals, Orexigen Therapeutics and Vivus securities. Cowen and Company, LLC compensates research analysts for activities and services intended to benefit the firm's investor clients. Individual compensation determinations for research analysts, including the author(s) of this report, are based on a variety of factors, including the overall profitability of the firm and the total revenue derived from all sources, including revenues from investment banking. Cowen and Company, LLC does not compensate research analysts based on specific investment banking transactions.
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Distribution of Ratings/Investment Banking Services (IB) as of 09/30/13 Rating Count Buy (a) 394 Hold (b) 255 Sell (c) 22
Count 54 5 1
(a) Corresponds to "Outperform" rated stocks as defined in Cowen and Company, LLC's rating definitions. (b) Corresponds to "Market Perform" as defined in Cowen and Company, LLC's ratings definitions. (c) Corresponds to "Underperform" as defined in Cowen and Company, LLC's ratings definitions. Note: "Buy", "Hold" and "Sell" are not terms that Cowen and Company, LLC uses in its ratings system and should not be construed as investment options. Rather, these ratings terms are used illustratively to comply with FINRA and NYSE regulations.
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Legend for Price Chart: I = Initation | 1 = Outperform | 2 = Market Perform | 3 = Underperform | T = Terminated Coverage | $xx = Price Target | NA = Not Available
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