Takeda Pharmaceutical’s U.S. subsidiary will return its U.S. rights to the obesity treatment Contrave® (naltrexone HCl/bupropion HCl) to Orexigen Therapeutics, which will re-acquire those rights for $75 million-plus, the companies said today.

The end of the collaboration is subject to clearance under the Hart–Scott–Rodino Antitrust Improvement Act. Upon closing of the agreement, Orexigen will pay Takeda $60 million to acquire Contrave U.S. rights, followed by an additional $15 million in the first quarter of 2017.

Orexigen is also required to pay Takeda milestone payments upon achievement of certain levels of U.S. net sales of Contrave. The first such payment, totaling $10 million, will occur when Contrave net sales reach $200 million in any calendar year.

However, Takeda will continue to commercialize Contrave in the U.S. during a 180-day transition period. During that period, Orexigen will continue to earn royalties on net sales of Contrave while the companies share clinical development costs, in accordance with a 2015 amended collaboration agreement.

At the end of the transition period, Orexigen said, it will be entitled to all net sales, but will also be responsible for all expenses.

To fund commercialization of Contrave in U.S., Orexigen said it has sold $165 million in convertible senior secured notes in a private placement to an investor syndicate led by funds managed by The Baupost Group.

With the additional capital raised through the convertible notes issuance, Orexigen said, it believes it has sufficient capital to fund its U.S. commercialization plan for Contrave and achieve projected profitability for 2019.

In addition to boosting Orexigen’s prospects for long-term profitability, thus creating more value for shareholders, the deal also reflects Takeda’s desire to commit more of its resources to its core areas of therapeutic focus.

Takeda’s therapeutic areas consist of “general medicine,” including oncology, cardiovascular and metabolic, central nervous system, gastrointestinal, respiratory and immunology, and vaccines.

Orexigen and Takeda agreed to end a collaboration by the companies launched in September 2010, when Orexigen licensed U.S. rights to the drug to Takeda. The collaboration gave Takeda responsibility for all commercial and related expenses. In return, Takeda agreed to pay Orexigen $50 million upfront, and as much as more than $1 billion in payments tied to achieving regulatory and sales milestones, plus tiered double-digit royalty payments.

According to Orexigen’s Form 10-K annual report for 2015, filed February 26, the company last year recognized approximately $24.3 million in revenues from its agreement with Takeda, including approximately $10.6 million in royalties and approximately $13.7 million in upfront and milestone payments.

Separately, Orexigen said it inked an agreement with Valeant Pharmaceutical to commercialize and distribute the obesity treatment in 18 Central and Eastern European nations as well as Turkey—where the drug is marketed under the name Mysimba®. The value of that agreement was not disclosed.

Approved by the FDA in September 2014, Contrave is indicated as an adjunct to diet and exercise for chronic weight management in adults with an initial body mass index (BMI) of 30 kg/m2 or greater (obese), or 27 kg/m2 or greater (overweight), with at least one weight-related comorbid condition—such as hypertension, type 2 diabetes mellitus, or dyslipidemia.








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