This morning Orexigen Therapeutics became the second of the three leaders in the obesity drug race to partner with a larger company. They’ve successfully courted Takeda, which now gets exclusive marketing rights to obesity drug Contrave in the U.S., Canada, and Mexico, if the drug gets regulatory approval. Orexigen’s shares soared on the news, first released in the pre-dawn hours this morning.
In the deal, Orexigen gets $50 million upfront from Takeda and could nab up to $1 billion more, depending on whether Contrave meets certain regulatory and sales milestones. Further details about the agreement are available on an Orexigen press release.
Contrave refresher: Contrave is a combination of two drugs already on the market: naltrexone, which is typically used to manage alcohol or opioid dependence, and the antidepressant bupropion. Orexigen’s developed a sustained-release formulation of those active ingredients. This is thought to alleviate the nausea that cropped up in clinical trials, but also could come in handy in terms of real-world prescriptions if the drug is approved. People might want to save money by taking the generic versions of Contrave’s two components but it isn’t clear how that would work for them.
In July we covered the first partnership deal in the obesity drug race, that of Eisai and Arena Pharmaceuticals, which is developing the obesity drug candidate lorcaserin. It’s worth stepping back to compare and contrast the deals.
At a glance, much looks the same. U.S.-based biotech company developing a potential obesity medication partners with a company based out of Japan. Biotech gets $50 mil upfront, with a tantalizing promise of more if certain milestones are met.
But Arena’s press release about the Eisai deal contains a few more specifics about pricing. I don’t see comparable language in the Orexigen release. From Arena’s release:
Under the terms of the agreement, Arena will receive an upfront payment of $50 million from Eisai and, upon regulatory approval and the delivery of product supply for launch, up to an additional $90 million in milestone payments. Arena will sell lorcaserin to Eisai for a purchase price starting at 31.5% of Eisai’s annual net product sales, and the purchase price will increase on a tiered basis to as high as 36.5% on the portion of annual net product sales exceeding $750 million. Arena is also eligible to receive $1.16 billion in one-time purchase price adjustment payments based on annual sales levels of lorcaserin and up to an additional $70 million in regulatory and development milestone payments.
John Carroll of FierceBiotech noticed something’s been missing from the obesity drug deals: U.S. companies.
Noticeably absent from the deal-making are the U.S. pharma companies, several of which have been badly burned by obesity drugs’ troubled safety record.
He also noted that none of the three contenders has landed “a blockbuster-sized upfront check–a sign of the serious concerns about potential safety issues at the agency.”
Now that Orexigen and Arena have both found partners for their obesity drugs, you have to wonder whether Vivus will ink a deal for its obesity drug Qnexa. If safety truly is king in the minds of potential partners, then July’s FDA panel thumbs-down for Qnexa has to be a disappointment. Still, FDA doesn’t always follow a panel’s recommendation, so it will be interesting to watch what happens next.
Bonus ‘mark your calendar’ content: Sept. 16th is the day that the FDA’s panel will meet to discuss Arena’s lorcaserin. This could give us something to compare the Qnexa decision to and give us a better idea of how the obesity race will shake out. So stay tuned.
UPDATE 10:37 AM 9/2: Added $OREX stock link.
UPDATE 1:58 PM 9/2: Healthcare-focused investment banking firm Leerink Swann released a note to investors today, wherein analysts Steve Y. Yoo and Joshua Schimmer called the terms of the deal “excellent,” adding “We see this as an important derisking event from the commercial perspective, as Takeda is a well-funded company with good experience in the metabolic space (Actos) and clearly focused on obesity ([Amylin Pharmaceuticals] development partnership).”
Takeda’s partnership with Amylin includes an exclusive license on Amylin’s obesity drug candidate. Like Orexigen’s Contrave, Amylin’s leading drug is also a combo, but of two different entities, metreleptin and pramlintide.
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