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Orexigen Changes Course, Share Price Falls

Shares of Orexigen Therapeutics fell sharply Dec. 5 following news of CEO Gary Tollefson’s resignation and plans to scale back on the number of drugs in development.

Orexigen’s stock was down 44 percent, at $3.02, as of midday. Shares of Orexigen, traded under the symbol OREX on the Nasdaq, fell as low as $1.55 earlier in the day, setting a new low for the year.

Wall Street was reacting to Orexigen’s announcement to end mid-stage trials for its drugs to treat obsessive-compulsive disorder and to treat weight gain brought on by antipsychotic drugs.

Orexigen is the latest in a string of biotech companies to redirect its efforts and capital resources toward developing later-stage drugs. The company said it would concentrate on obesity drug candidates Contrave, which is in Phase 3 trials, and Empatic, which is in later stages of Phase 2 trials. It anticipates announcing late-stage results of a Contrave study in January, it said.

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Tollefson, who took a leave of absence in November, submitted his resignation Dec. 4. The company said he is battling acute leukemia.

Biotech veteran and venture capitalist Eckard Weber is serving as the company’s interim CEO while it searches for Tollefson’s replacement.

Additionally, Anthony McKinney, the company’s chief business officer, and Frank Bymaster, the vice president of neuroscience, left the company “to pursue other opportunities.” Chief Scientific Officer Michael Cowley will also be stepping down from his position, but will serve as an Orexigen consultant.

, Heather Chambers

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