A major management shakeup at Orexigen Therapeutics ( OREX) announced Friday comes weeks before the small drug company is set to release pivotal phase III data on an experimental obesity drug.

Shares of the San Diego-based drugmaker were down $3.10, or 57%, to $2.30 Friday after the company said three top executives, including CEO Gary Tollefson, would be leaving the company. Two drug development programs in midstage trials were also discontinued.

The unexpected shakeup comes as Orexigen gears up to release the first phase III data on its obesity drug Contrave. Results from a study of Contrave in patients with mild to moderate obesity are expected soon, perhaps in early January.

Tollefson has been battling cancer, so his decision to leave Orexigen is not a total surprise. However, the departure of Chief Business Officer Anthony McKinney and Frank Bymaster, vice president of neuroscience, is rattling the confidence of investors. McKinney, in particular, was seen by some as a possible choice to lead Orexigen in the future.

"The facts that these guys are all leaving right before the Contrave data are announced is not going to inspire much confidence," said one analyst for a buy-side healthcare investment firm with no position in the company.

Orexigen is one of three small drug companies -- Vivus ( VVUS - Get Report) and Arena Pharmaceuticals ( ARNA - Get Report) being the other two -- with obesity drugs in late-stage clinical development. As reported earlier this week, Vivus is expected to announced results from clinical trials of the company's obesity drug Qnexa any day.

Contrave is a combination of two currently approved drug, bupropion and naltrexone, in a sustained-release formulation designed to promote weight loss by reducing appetite, increasing metabolism and tamping down the reward system in the brain that causes food cravings.

Lazard Capital analyst Matt Osborne, in a note to clients Friday morning, said the cutting of Orexigen's earlier-stage programs was done to preserve the company's cash.

"We expect the stock to react negatively to this news, but the core programs (and valuation) remain intact and we view any weakness in the shares as an opportunity ahead of Phase III data for Contrave for obesity in January 2009, and more obesity data in mid-2009 for Contrave and Empatic," he wrote. Osborne has a buy rating on Orexigen, which has a banking relationship with Lazard.

Empatic is another two-drug combination being developed by Orexigen as a weight-loss drug for people with moderate to severe obesity.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.