* FDA reviewers: diet drug works but cite safety issues
* Outside FDA advisers meet Tuesday to weigh Contrave
* Analysts divided on impact of safety questions
* Contrave sales could reach ${esc.dollar}1.2 billion by 2018
* Orexigen shares close down 12 percent (Rewrites first paragraph; updates shares to close)
By Susan Heavey
WASHINGTON, Dec 3 (Reuters) - Orexigen Therapeutics's <OREX.O> diet drug, the last of a trio of fat pills to face scrutiny this year, appears to help some people lose weight but heart risks and other issues are a concern, U.S. reviewers said in documents released on Friday.
Shares of Orexigen fell as investors feared its Contrave drug might fail to dodge safety issues that caused the Food and Drug Administration to reject two rival pills in October.
Drugmakers for decades have failed to develop a successful pill to help people shed pounds without serious side effects, and few options remain on the U.S. market. [ID:nN29219928]
FDA staff, in a review of Contrave 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.
Shares of Orexigen closed Friday down 12.1 percent at ${esc.dollar}4.81 on Nasdaq.
"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.
But some analysts said FDA's Contrave review was not as negative as reviews of its two rivals. FDA staff, they said, had pointed to known risks of Contrave's two component drugs that are already approved for other uses.
U.S. clearance would be a boon for Orexigen and expand the ${esc.dollar}382 million annual market for weight-loss drugs in a nation where two out of three people are overweight or obese.
Contrave sales could reach ${esc.dollar}1.2 billion by 2018, according to data from BioMedTracker.
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, adding that he expects a positive vote next week from the advisers.
In October, the FDA rejected Arena Pharmaceuticals Inc's <ARNA.O> lorcaserin, citing potential concerns about cancer findings in animal studies. [ID:nN23139489]. That month it also shot down Vivus Inc's <VVUS.O> Qnexa, asking for more data on its heart risks. [ID:nN28158788]
CURBING CRAVINGS
Contrave combines two already-approved medicines: the alcohol and drug addiction drug naltrexone and the antidepressant bupropion. Contrave aims to boost metabolism while curbing appetite and cravings.
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. Overall, average weight loss in the company's four trials ranged from 3.3 percent to 4.8 percent.
FDA staff said "the number of major adverse cardiac events was too small to make reliable inferences about" Contrave's heart risks. That could require more study, and the agency is discussing such a study with the company, they said.
At the meeting on Tuesday, the FDA plans to ask its panel of outside experts if the benefits of Orexigen's pill outweigh the risks, and if additional studies should be done. A final FDA decision is expected by Jan. 31.
Orexigen separately said its data showed Contrave had met FDA's criteria for new diet pills and that major heart problems "were uncommon," occurring at a rate comparable to a placebo.
Orexigen, which has partnered with Takeda Pharmaceutical Co Ltd <4502.T> to help market the drug, said even modest weight loss can significantly improve patients' health.
Diet and exercise are effective in helping people lose weight, but some doctors and others say such efforts can be so difficult that drugs or other options like surgery are needed.
Separately on Friday, another FDA advisory panel was weighing whether to recommend use of Allergan Inc's <AGN.N> stomach band in people who are less obese than those now considered candidates for the surgery. [ID:nN02259757] (Reporting by Susan Heavey; Editing by Derek Caney, Lisa Von Ahn and Tim Dobbyn)
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