Trading Orexigen Therapeutics Terrible Results (OREX, ARNA, VVUS)

Orexigen Therapeutics, Inc. OREX shares are getting hammered in pre-market trading, down over 70% after the FDA said it wants Orexigen to conduct additional tests for Contrave, its weight loss drug. The concerns are over heart safety issues. The FDA said it may eventually approve the drug, but it will be harder going forward. Contrave is viewed as the most promising of the three diet pills, from Arena Pharmaceuticals, Inc. ARNA and VIVUS, Inc. VVUS. 40% of patients taking Contrave for at least a year lost 5% of their body weight. Last year Contrave received a positive vote from the FDA's panel of outside advisers, getting a 13-7 vote in favor of the drug. Traders trading Oreixgen would probably want to go short the other two names, as these stocks will go down in sympathy with OREX, at least for today. Disclosure: no position in names mentioned