NEW YORK (TheStreet) -- Orexigen Therapeutics (OREX) shares are down 7.29% to $6.36 on heavy volume trading Tuesday after the company announced that it was terminating a required cardiovascular outcomes trial for its weight loss drug Contrave.
Two months ago the company released preliminary data from the Contrave trials that it said showed that Contrave could be used to help prevent heart attacks, based on the completion of about a quarter of the study.
That declaration was met with resistance from Dr. Steven Nissen of the Cleveland Clinic and lead researcher during the Contrave trials. Nissen disputed the company's claims that Contrave showed cardiovascular benefits, saying that patients were taking the treatment on "unreliable or unstable" data.
Contrave was prescribed 117,000 times during its first three months on the market, according to Forbes, an unprecedented amount for a weight loss drug, before the company's heart benefits announcement in March.
The FDA conditionally approved Contrave with the requirement that the drug complete several post-marketing trials including the cardiovascular study known as Light, which the company halted today.
Orexigen noted that it plans to reopen the study, who's original completion date was 2017, later this year with a targeted completion date of 2022.
TheStreet Ratings team rates OREXIGEN THERAPEUTICS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate OREXIGEN THERAPEUTICS INC (OREX) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk."