Orexigen signs licensing deal worth $1 billion for obesity drug Contrave with TakedaBy AP
Thursday, September 2, 2010
Orexigen signs $1 billion obesity drug deal
NEW YORK — Shares of Orexigen Therapeutics Inc. surged Thursday after the drugmaker said it signed a $1 billion co-development agreement for its experimental obesity drug Contrave with Takeda Pharmaceuticals.
Under the deal, Orexigen will receive $50 million upfront from Takeda, Japan’s largest drugmaker. Takeda will get exclusive rights to market Contrave in the U.S., Mexico and Canada and Orexigen will keep co-marketing rights in the U.S. The California drugmaker will be eligible for payments of up to $1 billion for certain milestones along with royalty payments. The Food and Drug Administration is expected to make a regulatory decision on Contrave by Jan. 31.
Orexigen shares jumped 84 cents, or 18.3 percent, to close Thursday at $5.43 on seven times average daily volume.
“We believe the deal terms provide significant opportunity for Orexigen shareholders to benefit from the commercial success of Contrave and view Takeda as a strong partner that can capture significant share in the anti-obesity market,” JMP Securities analyst Charles Duncan wrote in a note to clients.
Contrave is a combination pill, mixing an antidepressant with an anti-addiction drug. The drug has shown weight loss results between 5 percent and 10 percent of body weight, with side effects such as nausea.
Orexigen, based in La Jolla, Calif., is one of three companies racing to bring new weight loss drugs to the market.
Arena Pharmaceuticals Inc.’s lorcaserin is up for an FDA panel review on Sept. 16. Also, Vivus Inc. is trying to gain approval for its drug Qnexa, which received a negative panel recommendation in July because of safety concerns.
With U.S. obesity rates nearing 35 percent of the adult population, doctors and patients say new pharmaceutical treatments are needed. And Wall Street analysts say even a modestly effective drug has blockbuster potential.
But weight loss drugs have been plagued by negative side effects — particularly on the heart — for decades. The most notable was Wyeth’s diet pill-drug combination, fen-phen, which was pulled off the market in 1997 because of links to heart-valve damage and lung problems.
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