Diet pill maker Orexigen Therapeutics can finally turn out the lights. After a years-long battle to bring its finances into the black, the company put its assets for sale, filed for bankruptcy, and finally attracted a buyer.
The San Diego-based company has inked a deal to be purchased for $75 million by Nalpropion Pharmaceuticals, a newly-created company capitalized by an investor group that includes Pernix Therapeutics, a small-cap public company in New Jersey.
Nalproprion is buying all of Orexigen’s assets, including worldwide rights to the weightloss drug Contrave (marketed under the brand name Mysimba in the EU).
The past few years have been tumultuous for Orexigen, with the company’s stock plummeting 99% since its height in 2015. Despite a best-selling weightloss drug on the market among its branded competitors, the company has faced hurdle after hurdle, including a legal fight to defend its patent rights and a lackluster market for diet pills in general.
The company’s sole revenue driver was Contrave, which came on the market in 2014. It quickly snagged the biggest share of sales among brand name diet pills, capturing 52% and surpassing Qsymia, Saxenda, and Belviq. The company was inching — albeit very slowly — toward profitability for the past 15 years. It wasn’t enough.
Back in 2017, CEO Michael Narachi told me he hoped a merger or sale would get the company back on track with the ability to share costs with another organization. Then last month Orexigen announced a Chapter 11 bankruptcy in a last-ditch effort to settle its accounts (and likely attract a buyer).
The deal with Nalpropion is subject to higher and better offers, Orexigen noted in a press release, and the offer window will close June 21.
Orexigen sent this statement in response to my request for more information about the San Diego office, and the future of the employees working there.
“The employees at Orexigen are an important element of the value of the company. Through our interactions with this potential buyer, we believe they also recognize the contributions made by our employees. We plan to continue to support our team during this process.”
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