After Orexigen Therapeutics announced on February 1 that the FDA rejected the weight loss drug Contrave an investigation for investors in Orexigen Therapeutics, Inc. (NASDAQ:OREX) shares over possible breaches of fiduciary duties was announced.

The investigation by a law firm concerns whether any insider or director or officer has breached their fiduciary duties by taking advantage of the recent substantial stock drop of more than 70% in one day in response to the announcement by Orexigen Therapeutics, Inc that the FDA rejected the weight loss drug Contrave.

On February 1 2011, shares of Orexigen Therapeutics Inc. (NASDAQ: OREX) fell over 70% from as high as $9.91 on Jan 31 to as low as $2.48 per share after the Orexigen Therapeutics disclosed in a press release that the U.S. Food and Drug Administration (FDA) rejected Contrave and requested more clinical data before the drug may be approved. Specifically, the FDA said Orexigen Therapeutics must first conduct a long-term study to show that the drug does not raise the risk of heart attacks.

On Nov 3, 2010 Orexigen Therapeutics, Inc. already announced in its recent Third Quarter 2010 Financial Results that it has filed a New Drug Application with the U.S. Food and Drug Administration (FDA) for its lead investigational product, Contrave(R), which is being developed in coordination with Takeda Pharmaceutical Co and is a combination of two drugs, the antidepressant bupropion and the anti-addiction drug naltrexone, to fight obesity, that has completed Phase III clinical trials. Orexigen Therapeutics said that the FDA has scheduled the Endocrinologic and Metabolic Drugs Advisory Committee meeting on December 7, 2010 and the Prescription Drug User Fee Act action date, which is the final decision on the drugs approval, has been set for January 31, 2011. Over next two days OREX shares increased to $6.17 per share.

But then shares of Orexigen Therapeutics, Inc. (NASDAQ: OREX) fell to $4.76 per share, or to almost 50% of its current 52weekHigh of $8.88 after Orexigen Therapeutics disclosed on December 3 in a SEC filing that the FDA posted on its web site the FDA Briefing Information for the December 7, 2010 meeting of the Endocrinologic and Metabolic Drugs Advisory Committee to review the New Drug Application for its product candidate Contrave. The FDA said four studies conducted by Orexigen Therapeutics showed patients taking its drug lost, on average, 4.2% more weight than patients taking a placebo. However, the results did not meet a 2007 FDA guideline that there should be at least a 5% difference in weight loss between those groups in order to be considered effective and the FDA's review also raised questions about the pill's effects on the heart. The FDA reported higher rates of side effects, including high blood pressure, dizziness and insomnia, are already linked to the antidepressant drug bupropion and the anti-addiction drug naltrexone, which are combined in Contrave.

The FDA said Contrave 'attenuates or eliminates the blood pressure and pulse reductions that are normally seen with weight loss,' which has an unknown impact on cardiovascular risk over the long-term. The FDA also complained that Orexigen Therapeutics enrolled few elderly patients or patients with a history of heart disease in its trials for Contrave, making it difficult to determine the drug's safety in patients at risk for heart attack and stroke. The FDA panel will be asked whether an additional clinical study 'designed to examine the drug's effect on risk for major adverse cardiac events should be conducted' before the product is approved or whether it could be conducted in a post-market setting.

Since the February 1 announcement OREX shares have increased and closed last Friday at $3.61 per share.