Orexigen Therapeutics went bankrupt trying to turn its weight loss pill, Contrave, into a commercial success. Now Pernix Therapeutics will try its luck.
Pernix (NASDAQ: PTX) said Monday that a business entity it helped create, Nalpropion Pharmaceuticals, has closed a deal for Contrave. Morristown, NJ-based Pernix formed Nalpropion to bid on Contrave, which Orexigen auctioned off in its bankruptcy case. Nalpropion paid $73.5M for the drug.
Contrave combines an extended release form of the anti-depressant bupropion with naltrexone, a drug prescribed to deter substance abuse. The FDA approved Contrave in 2014, which at the time made it the third weight-loss pill the agency had sanctioned since 2012, along with lorcaserin (Belviq), from Arena Pharmaceuticals (NASDAQ: ARNA), and phentermine/topiramate (Qsymia), from Vivus (NASDAQ: VVUS). All three of those drugs have struggled commercially.
Though Contrave went on to become the most widely prescribed weight-loss drug of all of them, generating more than 2.5 million prescriptions since it first hit the market, sales haven’t been nearly enough to offset Orexigen’s debt. The company filed for Chapter 11 bankruptcy protection earlier this year. (Arena Pharmaceuticals, meanwhile, sold lorcaserin to Eisai in 2017 to focus elsewhere, and Vivus restructured in May.)
Besides Pernix, Nalpropion’s investors are Highbridge Capital Management and Whitebox Advisors. Under the terms of the deal, Pernix will manage Nalpropion and handle distribution of Contrave for two years in return for a fee equal to 5 percent of net sales. Pernix will later receive options to acquire either up to 49.9 percent of Nalpropion or the whole business. Pernix didn’t say on Monday when it can exercise those options or how much it would pay in either scenario.
Here’s more on the Orexigen bankruptcy that led to the auction of Contrave.