Arena Pharmaceuticals (ARNA) said Thursday it has agreed with Japan's Eisai to a licensing deal for its weight-loss drug that's worth potentially more than $1.3 billion. ARNA shares spiked over 20% in earlier premarket trading, but have cooled off somewhat and are 15% higher in recent trades.
Eisai will market Arena's lorcaserin, a treatment for obesity and weight management, in the U.S. following U.S. Food and Drug Administration approval. In return, Arena will receive an upfront payment of $50 million from Eisai and, upon regulatory approval and the delivery of product supply for launch, up to an additional $90 million in milestone payments for reaching certain targets. Arena will also be eligible to receive $1.16 billion one-time payment in the future based on the level of annual sales.
Arena keeps the rights in other countries, CEO Jack Lief told The Associated Press.
Arena's lorcaserin is one of a few drugs that competing companies such as Vivus (VVUS) and Orexigen (OREX) are trying to develop and be first to market. They aim to deal with the growing obesity problem. The drug works by interacting with a brain receptor involved in appetite control and feelings of satiety.
For now, Vivus is leading the pack as its drug's FDA review is upcoming this month. Lorcaserin is set for review by an FDA panel on Sept. 16. VVUS shares were a little weak in premarket action; OREX shares dropped over 3.5%.
"Execution of this commercial agreement is a major milestone in our plans for lorcaserin," Lief said in a statement.
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