* FDA reviewers: diet drug works but cite safety issues
* Outside FDA advisers meet Tuesday to consider drug
* J.P. Morgan analysts say safety discussion will be key
* Orexigen shares down 8.6 percent (Rewrites, adds analyst comments, updates share price)
By Susan Heavey
WASHINGTON, Dec 3 (Reuters) - Orexigen Therapeutics's <OREX.O> diet drug appears to help some people lose weight but heart risks and other issues remain a concern, U.S. reviewers said in documents released on Friday as shares of the company fell.
Orexigen is hoping its prescription weight-loss pill Contrave can win U.S. approval and dodge safety issues that caused the Food and Drug Administration to reject two rival pills in October.
FDA staff, in a review released ahead of an expert advisory panel meeting Tuesday, said that while effective, there remained the possibility of heart risks, seizures and psychiatric effects such as suicidal behavior.
"It's quite clear that the safety discussion will once again be key, especially with regard to cardiovascular risk where Contrave may face an uphill battle," J.P. Morgan analysts said in a research note,
Shares of Orexigen were down 8.6 percent to ${esc.dollar}5 in early afternoon trading on the Nasdaq.
U.S. clearance would be a boon for Orexigen and the roughly ${esc.dollar}382 million market for weight-loss drugs in a nation where two out of three people are overweight or obese, although some health experts worry such treatments could be overused.
Contrave sales could reach ${esc.dollar}1.2 billion by 2018, according to data from BioMedTracker.
Some analysts said the FDA's Contrave review was neither positive or negative toward the drug. They said reviewers largely pointed to risks already known since the drug combines two medicines already in use.
While FDA staff point out some areas of concern, "the absence of a negative bias from the FDA ... is a positive," Canaccord Genuity analyst Adam Cutler told Reuters.
Cutler said he expects a positive vote next week from the expert advisers. The FDA will later make its decision, expected by Jan. 31.
Contrave includes naltrexone, used to fight alcohol and drug addiction, and the antidepressant bupropion. It aims to target cravings, curb appetite and boost metabolism.
Results from company trials found that at least 35 percent of patients given the drug lost at least 5 percent of their weight, the FDA staff said.
In late October, the FDA rejected Arena Pharmaceuticals Inc <ARNA.O> and partner Eisai Co Ltd's <4523.T> drug, lorcaserin, citing potential concerns about cancer risk following tumors that were found during the company's animal studies. [ID:nN23139489]
A few days later, the agency shot down Vivus Inc's <VVUS.O> Qnexa, which also combined two known drugs, appetite suppressant phentermine and anti-seizure drug topiramate, and asked for more data on its heart risks. [ID:nN28158788] (Reporting by Susan Heavey; Editing by Derek Caney, Lisa Von Ahn and Tim Dobbyn)
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