Orexigen shares are under pressure after it ended a study on the potential effects on the heart of its obesity drug Contrave and said it is at odds with its marketing partner on the drug.
Orexigen says its partner, the Japanese drugmaker Takeda, accused Orexigen of breaching an agreement between the companies by releasing some of the data from the study before it was finished. Among other items, Takeda wants Orexigen to pay for the entire cost of a second study, which could cost as much as $200 million. That trial was previously announced and is expected to start later this year. The two companies had been planning to split the costs.
The companies agreed to work together on Contrave in 2010. Under the original terms of their agreement, Orexigen said it could get more than $1 billion if the drug was approved and met sales targets. However Takeda wanted to renegotiate that deal and the companies haven't agreed on all of the new terms.
RBC Capital Markets analyst Simos Simeonidis said that it is unlikely that Takeda would want to end the collaboration with Orexigen because it could easily terminate their agreement if it wanted to. It is more likely, he said, that Takeda is using the process to get Orexigen to share the costs of the upcoming cardiovascular study.
Shares of Orexigen fell 92 cents, or 15.5 percent, to $5.01 in midday trading. The stock fell 13.6 percent on Tuesday.
The La Jolla, California-based company said it believes Takeda's claims of a breach are without merit and that the dispute shouldn't affect sales of Contrave, which was approved in September.
In March Orexigen disclosed data showing that a group of patients taking Contrave had fewer serious cardiovascular problems than those who took a placebo or fake drug. The results had led some to believe that Contrave not only did not have detrimental effects on the heart, but could have a side benefit to cardiovascular health.
The Food and Drug Administration criticized Orexigen for making the data public because early trial results aren't always reliable and they can affect the integrity of the study itself.