Shares of Orexigen Therapeutic Inc. (OREX) surged 23 percent Thursday on news that the company licensed its new and most advanced experimental drug, the diet pill Contrave — which is a combination therapy believed to address both biological and behavioral drivers of obesity — to Takeda Pharmaceutical Co. of Japan.
Under terms of the deal, which has an upfront payment of $50 million and the potential for later payments that could exceed $1 billion, Japanese pharma giant Takeda will market the product in the U.S., Mexico and Canada — upon regulatory approval — while Orexigen will retain the right to co-promote with Takeda in the United States.
“Takeda is an ideal partner for Contrave given its proven track record in commercializing innovative medicines and its commitment to the treatment of obesity,” said in a statement Michael Narachi, President and CEO of Orexigen. “We believe this is a great strategic partnership to enable our goal of a strong market entry for Contrave, if approved…”
Approximately 75 million Americans suffer from obesity and that number is expected to rise to 103 million by 2018.
The new deal allows Orexigen, which had 2009 global sales of more than $17 billion, to become a major competitor in the race to get an obesity drug on the market.
La Jolla, California – based Orexigen expects to receive a decision from the U.S. Food and Drug Administration [FDA] on Contrave, one of three new diet drugs up for FDA approval, by Jan. 31, 2011. The company is in a race with Arena (ARNA) and Vivus Inc. (VVUS) to develop a new obesity treatment.
OREX gained $1.02, or 22.22%, to $5.61 rtq. at 1:53 pm E.T. in Nasdaq composite trading. Orexigen shares have traded between $3.81 and $10.83 over the last 52 weeks.