Orexigen Therapeutics Inc. said Dec. 22 it raised a net total of $86.9 million through a public offering of more than 5.6 million shares of stock.
In its prospectus filed with the Securities and Exchange Commission, the La Jolla-based biopharmaceutical company said it would use the offering proceeds to pay for the cardiovascular safety trial for its lead drug candidate Contrave, as well as for other general corporate purposes.
Orexigen has been working for years to gain the Food and Drug Administration’s approval for its obesity drug Contrave, which has already completed phase 3 clinical trials. The company in September reached an agreement with the FDA to conduct a “reasonably sized” trial in 2012 to prove that the drug will not pose heart problems.
The trial, which the company said would cost less than $120 million, will take about two years to complete. If Contrave meets the FDA’s safety requirements, an approval can come in 2014.
Contrave is a combination of two well-established drugs, naltrexone and bupropion, which works by reducing appetite, boosting metabolism and addressing the reward system in the brain that causes food cravings, the company said.
Contrave is one of many diet pills that are navigating rough regulatory waters. Among other local players, San Diego-based Arena Pharmaceuticals Inc. is seeking to resubmit its drug candidate lorcaserin, which the FDA rejected in 2010 due to possible cancer risks.
For its stock offering, Orexigen priced its shares at $1.45 each, with New York-based investment bank Leerink Swann LLC acting as sole manager. Shares, which trade on Nasdaq under the symbol OREX, were trading at $1.63 in the morning of Dec. 27.
— Kelly Quigley