Orexigen Therapeutics, Inc. (NASDAQ: OREX) Finds Partner To Share Burden Of Distributing Contrave


Orexigen Therapeutics, Inc. (NASDAQ: OREX) has landed a partner who will help it carry the burden of commercializing and distributing Contrave in Canada. That partner is Valeant Canada, a unit of Valeant Pharmaceuticals Intl Inc. (NYSE: VRX). The latest deal builds on an earlier agreement between Orexigen and Valeant involving distribution of Mysimba in parts of Europe.

Bearing expenses

The highlight of the agreement that Orexigen Therapeutics, Inc. (NASDAQ: OREX) and Valeant have inked is that the latter will bear the burden of seeking regulatory approval and subsequently distributing Contrave in Canada. What Orexigen will do as part of the partnership arrangement is that it will supply Valeant Canada with Contrave tablets to distribute in the country once it has obtained regulatory clearance.

Payment for the supplies – Orexigen Therapeutics, Inc. (NASDAQ: OREX)

Orexigen will receive an undisclosed amount of payment from Valeant for supplying the company with Contrave tablets. On top of that, Orexigen will be eligible for milestone payments bordering on regulatory and sales targets.

Though the ground is already prepared for revenue sharing between Orexigen and Valeant for selling Contrave in Canada, it will take some months before the revenues start flowing in. Orexigen said that it expects its partner to file for approval to market Contrave in Canada by January next year.

Why Valeant?

If you are wondering why Orexigen Therapeutics, Inc. (NASDAQ: OREX) settled for Valeant as its Contrave partner in Canada, CEO Mike Narachi said that they believe the company has strong commercial and regulatory capabilities. That is another way of saying that Orexigen believes it will unlock benefits in the Canadian market faster through partnership with Valeant than any other route.

Orexigen Therapeutics, Inc. (NASDAQ: OREX) also sees Valeant helping in penetrating global markets quickly so that it can realize the full sales potential of its weight loss drug Contrave, which goes by the name Mysimba in Europe.

Launching Mysimba in 11 markets

Before the agreement to carry Contrave in Canada, Orexigen and Valeant had entered a deal to distribute the drug parts of Europe where they are targeting 19 countries. The companies are working to launch the drug in 11 Central and Eastern Europe countries in 4Q2016. That will be followed by launch in two more countries in 1Q2017.

Burden on economy

In Canada alone, the cost of dealing with obesity is estimated at $4.6 to $7.1 billion annually.


Leave A Reply