Orexigen Therapeutics in $1 billion-plus deal with Japan's Takeda for obesity drug Contrave in North America

San Diego, USA-based Orexigen Therapeutics (Nasdaq: OREX) has entered into an agreement with Japan's largest drugmaker, Takeda Pharmaceutical (TSE: 4502), for an exclusive partnership to develop and commercialize Contrave (naltrexone SR/bupropion SR), Orexigen's investigational drug for the treatment of obesity, in North America. News of the mega deal saw Orexigen's share price rocket as much as 23% to $5.65, tough closing the day just 18% higher at $5.43.

Under the terms of the deal, Orexigen will receive an upfront cash of $50 million from Takeda, which will obtain an exclusive marketing right for Contrave in the USA, Mexico and Canada while Orexigen retains the right to co-promote with Takeda in the USA. Orexigen will also be eligible to receive payments of over $1 billion upon achieving certain regulatory and sales-based milestones. Assuming Contrave is commercialized, Takeda will pay tiered double-digit royalty payments on net sales in the assigned territory.

Drug under review by US FDA