Dive Brief:
- Beleaguered obesity company Orexigen Therapeutics Inc. has thrown in the towel, entering into an agreement to sell "substantially all" of its assets to Nalpropion Pharmaceuticals Inc., in return for $75 million in cash.
- The deal includes its controversial weight loss pill Contrave and "certain other Orexigen assets," but is "subject to higher and better offers."
- The company announced bankruptcy in March, filing a voluntary petition under Chapter 11.
Dive Insight:
Contrave (naltrexone/bupropion) is the "number 1 prescribed weight loss brand in the U.S. with over 2.5 million prescriptions and over 100,000 unique prescribers," since its 2014 approval, according to Orexigen. However, that ranking is among a weight loss drug market that hasn't flourished as some had forecast, with doctors appearing reluctant to prescribe the medications in general.
But it's not just the market that has led to Orexigen's problems. In 2015, the company released interim data from a Contrave clinical trial that suggested that the drug prevented heart attacks, but got itself in hot water by not consulting the lead investigator, breaking FDA rules and protocols.
The study was planned with the stipulation that interim data should not be released, requiring Orexigen to conduct a second study. According to Matthew Herper of Forbes, Steven Nissen, the Cleveland Clinic doctor that oversaw the study, claimed that Orexigen had misled patients and investors about the therapy. When the clinic released the full dataset, it showed Contrave's heart benefit vanished over time.
Partner Takeda Pharmaceutical Co. Ltd. initially demanded from Orexigen the costs for running a second trial, and then in 2016, Takeda dropped its distribution partnership for Contrave, returning U.S. rights. Takeda explained the decision in a joint statement, saying its focus was on increasing "its promotional resources and support towards recent launches in the inflammatory bowel disease and major depressive disorder areas." Subsequently, Orexigen signed a handful of marketing deals, including with fellow struggling drugmaker Valeant Pharmaceuticals Inc.
Contrave is now potentially poised for a new lease of life. Nalpropion was created specifically for the purpose, capitalized by an investor group that includes specialty pharma Pernix Therapeutics Holdings Inc.
Yet Orexigen's leadership is keeping options open, at least for the next couple months.
"Orexigen will continue to work with other prospective bidders and will accept offers through June 21 with a goal to complete a successful strategic acquisition of Orexigen in mid-July," company CEO Michael Narachi said in a statement.