WASHINGTON D.C. ( TheStreet) -- A Food and Drug Administration panel voted 13-7 late on Monday to recommend approval for Orexigen Therapeutics' ( OREX) weight loss drug, Contrave, setting the stage for Contrave to be the first new diet drug approved by the FDA in a decade, and jump starting a rally in shares of diet drug companies.

Once Orixegen shares reopened in after hours trading on Tuesday night, shares soared more than 100%, and Oriexigen shares have been soaring since. In Wednesday's pre-market, Orexigen shares were up 139%, and the diet drug maker's stock opened up 113% after the opening bell.

Sales of the weight-loss drug could surpass $1 billion annually if approved by the FDA, according to market estimates. While the FDA doesn't need to follow the recommendation of the expert panel, the FDA often does follow an advisory panel's lead in recommending a drug for approval. A final FDA decision on Orexigen's Contrave is expected by the end of January.

In October, the FDA rejected two diet drugs, Arena Pharmaceuticals' ( ARNA - Get Report) lorcaserin and Vivus' ( VVUS - Get Report) Qnexa. Arena's drug was rejected based on cancer risks, and Vivus was asked by the FDA for more information on potential for heart attack.

At the open on Wednesday, both Vivus and Arena spiked by 16% and surpassed their daily average volume of trading within minutes of the open. Arena trading volume was almost double its daily average of 3 million shares traded shortly after the opening bell.

A TheStreetlive blog covered the Orexigen vote, during which the advisory panel decided the potential benefits of the drug outweighed the risk.

-- Written by Eric Rosenbaum from New York.

RELATED STORIES:


>To contact the writer of this article, click here: Eric Rosenbaum.

>To follow the writer on Twitter, go to Eric Rosenbaum.

>To submit a news tip, send an email to: tips@thestreet.com.