Shares for San Diego’s Arena Pharmaceuticals Inc. rose 17 percent following news that it will expand its partnership with Japanese drugmaker Eisai Co. to market the weight loss pill Belviq.
Arena will receive a $60 million upfront payment, and could receive an additional $176.5 million from Eisai if it meets certain regulatory and development milestones, it said in a Securities and Exchange Commission filing. Arena will receive up to about 36 percent of Eisai’s net sales of the drug.
This comes as welcome news for the drugmaker, as initial sales for Belviq were less than expected, and the company’s stock has slumped over the course of several months. Shares for the $1.05 billion market cap company closed at $4.79 on Nov. 8 — with the 71 cent increase proving the highest single-day gain it’s made in more than a year.
In the deal, Eisai will gain worldwide marketing rights to Belviq, excluding South Korea, Taiwan, Australia, New Zealand and Israel. Previously, Eisai had only secured rights to market in North and South America.
The two companies plan to complete further clinical trials on Belviq, developing a version of the drug that contains phentermine, a compound that suppresses appetite. Arena said it will also attempt to develop a once-a-day version of the drug and study it as a smoking cessation aid.
— Meghana Keshavan