San Diego-based Orexigen Therapeutics
Under the terms of the deal, Takeda has obtained an exclusive license from Orexigen to market the combination drug of bupropion/naltrexone (Contrave) in the U.S., Canada, and Mexico. In return, Orexigen pockets $50 million in upfront cash, may receive as much as $1 billion in regulatory and sales milestone payments, and stands to receive royalties of between 20 and 35 percent of sales if the drug is ever commercialized in North America. Orexigen will continue to shoulder the development costs prior to the FDA approval of Contrave, but if cleared for sale, the company will have an option to co-promote the treatment in the U.S. The news sent Orexigen shares up more than 25 percent at the opening bell of trading.
These are big deal terms for Orexigen as it seeks to gain a foothold in an increasingly competitive obesity drug market along with San Diego-based Arena Pharmaceuticals
Big Pharma has tread cautiously with the new wave of obesity treatments, remembering the sting of the fen-phen safety debacle of the 1990s and more recent safety concerns tied to drugs like Acomplia from Sanofi-Aventis. But Takeda hasn't been burned like that, and it has gained deep expertise in the closely related diabetes population with its hit treatment pioglitazone (Actos). Last year, Takeda also made a serious foray into obesity when it struck another potential $1 billion obesity drug deal with San Diego-based Amylin Pharmaceuticals
"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 Michael Narachi, Orexigen's CEO, in a statement. "We believe this is a great strategic partnership to enable our goal of a strong market entry for Contrave, if approved. It has been our belief that getting a partner involved early would be critical to a high-quality launch of Contrave, and with this partnership now in place, we are tightly focused on the regulatory review process and securing approval for Contrave."
Orexigen's rival, Arena, struck a partnership with the same $50 million upfront terms back in July, with another Japanese pharma company, Eisai Pharmaceuticals. That came right before investors were stunned when the third major player -- Vivus -- failed to win a key recommendation from an FDA advisory panel about its drug's safety and effectiveness.
Before that highly anticipated panel, I quoted one analyst who said there's "no clear winner" among the three new drug candidates, based on a review of their safety and effectiveness from clinical trials. If that's how doctors see it, then the bulk of market share could go to the company that gets to the market earlier and does a better job of marketing the product once it's available.
Right now, dates with the FDA loom large on the calendar for Orexigen, Arena, and Vivus. Arena's FDA panel is scheduled for Sept. 16, and the FDA's deadline to complete its drug application is Oct. 22. Orexigen is just a little bit behind, with its FDA panel date set for Dec. 7, and the FDA review deadline on Jan. 31. So this is a story we'll be watching unfold for some time.
More from Xconomy.com:
- Startup School: Round Two: The 2010 Xconomy Guide to Venture Incubators
- Why Facebook Places Will Make Foursquare Into a Footnote
- Kendall Square Wants an Entrepreneurial Walk of Fame and So Should Every Innovation Hub
Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. You can email him at email@example.com, or follow him at twitter.com/ldtimmerman.
Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.