Friday AH, OREX was up 60% on a press release stating they are going to review Contrave results ‘earlier then original scheduled’ pre-market on monday.   Strange action to say the least. 

What I am looking for is weight loss to placebo adjusted 5%.  This is an FDA ‘guideline’.  Last time Contrave reported results of a year study, the weight loss to placebo was 4.2%.  UNIMPRESSIVE.  However, when ARNA first reported Lorcaserin data, they came in at 3.9%, but after BLOOM, 4.9%.   I shorted ARNA the first time the reported Lorcaserin data as it actually went up pre-market on results, but quickly got cut in half when ‘investors’ realized the placebo adjusted result.

I will also be reviewing Contrave safety results and profile.  Last time, Contrave safety profile met all it’s goals.  If there is one hiccup here, OREX will also go down, because the FDA is not looking for anything like Hydroycut and diet pills.

There is going to be AT LEAST one winner out of OREX, ARNA and VVUS, in my opinion, to replace hydroycut.  The weight loss drug market is in the billions.  Especially in pill form, because you know how lazy people are.  None of these companies have a partner yet. 

FDA will not be a pushover for a diet drug approval either.  Contrave has got to sparkle, and if it does not, looking to short, especially since OREX seemed to have popped already.   There also has been negative chatter about a drug that is used in Contrave called Bupropion.  There will be some questions regarding this as well.

Last note, these diet pill companies seem to move together, so what is good for OREX may be good for ARNA and VVUS.  HOWEVER, it’s of my personal opinion that since these drugs are so late in the game, what is bad for OREX should really be good for ARNA and VVUS, but this would be breaking the hystorical trend of these three companies. 

Welsh

Disclosure:  Holding ARNA long, no current position in OREX