Orexigen Enters into Agreement to Sell Company to Newly Formed Entity Nalpropion Pharmaceuticals

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One month after filing for bankruptcy anti-obesity company Orexigen Therapeutics, Inc. could be acquired by the newly-formed company Nalpropion Pharmaceuticals, Inc. for $75 million in cash.

Nalpropion, which was recently formed as a special purpose entity and backed by an investor group that includes specialty pharmaceutical company Pernix Therapeutics Holdings, Inc. made a so-called stalking horse bid for Orexigen’s assets. In an announcement issued late Monday Orexigen said the new company will acquire all of its assets, including its top anti-obesity treatment Contrave if no better offers come along before the deal date of June 21. If “higher and better offers” are made, Orexigen said it could accept one of those instead of the Nalpropion deal. Michael Narachi, president and chief executive officer of Orexigen said the company has a goal to complete a successful strategic acquisition of Orexigen by mid-July.

Last month Narachi announced the intention to file for bankruptcy after senior leadership “assessed all options.”

Narachi said the company was encouraged that a deal was struck to acquire the rights to Contrave, which is also sold as Mysimba in Europe.

“Our goal is to ensure Contrave/Mysimba will continue to be available world-wide to help improve the health and lives of patients struggling to lose weight. Through our interactions with the investor group and Pernix, we have seen that they recognize the value and the growth trajectory that Orexigen has created for Contrave and that we have a shared commitment to serve this patient population,” Narachi said in a statement.

Although Contrave is the number one prescribed anti-obesity treatment in the United States, the company has had significant financial concerns for some time. In October 2017 the company indicated it may not have enough funds to continue operating and first posited the idea of a potential sale or merger agreement.

Contrave, a combination of naltrexone HCl and bupropion HCl extended release, was approved by the U.S. Food and Drug Administration in 2014 for use in extremely overweight individuals. Contrave is a combination of naltrexone, a drug used to treat alcohol and opioid dependence, and bupropion, a depression treatment. There are approximately 2.5 million prescriptions in the United States. Contrave is designed not only to curb hunger but also reduce cravings. Orexigen did have a deal with Takeda Pharmaceuticals that could have been potentially lucrative, but the Japan-based company sold the rights back to Orexigen in 2016 as part of a realignment of Takeda’s treatment focus.

Orexigen did not provide any information as to what would happen to its staff as a result of the asset sale.

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