Why is Orexigen Therapeutics’ stock up over 17% today? Well, BofA is out with a positive report saying the stock (OREX) could double. This actually should come as no surprise, as obesity related stocks are on the rise ever since shares of VVUS skyrocketed after their positive report on obesity drug Qnexa. It seems shareholders of obesity related stocks are going to have some fatter wallets in the coming months.
BofA/Merrill upgraded diet drug maker Orexigen Therapeutics Inc. (OREX, $4.24, +$0.54, +14.59%) to buy and doubled its share price target to $7. The company called Orexigen an “inexpensive obesity stock with long-term potential.” The firm cited as a possible catalyst a Food & Drug Administration meeting later this month to discuss need for cardiovascular outcome studies before FDA approval of obesity drugs. If the FDA goes that way, BofA/Merrill said, Orexigen is well positioned because it already is starting such a trial. Even if not, the firm said, investor excitement should grow for Orexigen’s Phase III-ready Empatic, which is similar to Qnexa from rival Vivus Inc. (VVUS, $20.26, -$0.40, -1.94%). Qnexa recently got FDA panel backing. (WSJ)