Orexigen (Nasdaq: OREX) rallies after FDA approves competing obesity drug

Northern, WI 6/28/12 (StreetBeat) -- Anti-obesity drug maker Orexigen (Nasdaq:OREX) is climbing after another company, Arena Pharmaceuticals (Nasdaq:ARNA), received FDA approval for its anti-obesity drug, Lorcaserin, yesterday afternoon. In a note to investors earlier this morning, research firm JMP Securities wrote that the FDA's approval of Lorcaserin suggests that the agency sees the need for an effective anti-obesity drug. The FDA's position on this matter could benefit Orexigen, said the firm, which thinks that the company offers the best value in the anti-obesity space.

The firm reiterated an $8 price target and Outperform rating on Orexigen. Meanwhile, JP Morgan reacted to the FDA's approval of Arena's Lorcaserin by upgrading shares of Orexigen this morning to Overweight from Neutral with a $10 target. In early trading Orexigen jumped 67c, or 13.62%, to $5.59.

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