With debt loom­ing, brow­beat­en di­et pill mak­er Orex­i­gen goes bank­rupt -- shares slide

Di­et pill mak­er Orex­i­gen Ther­a­peu­tics is wav­ing the white flag Mon­day morn­ing af­ter a years-long bat­tle to bring its fi­nances in­to the black. With crush­ing debt loom­ing, the com­pa­ny is fil­ing Chap­ter 11 bank­rupt­cy in a last-ditch ef­fort to set­tle its ac­counts.

This is not the first time the com­pa­ny has tried to right the ship. Back in Oc­to­ber, Orex­i­gen $OREX an­nounced it was seek­ing bid­ders for the com­pa­ny’s as­sets. The last straw for the drug­mak­er’s suf­fer­ing bal­ance sheet was a mas­sive debt pay­ment that came due thanks to slow sales of Orex­i­gen’s lead prod­uct, Con­trave. The San Diego-based com­pa­ny was sup­posed to reach $100 mil­lion in sales by the end of 2017, but came in shy at just un­der that fig­ure. As part of the loan terms, that fail­ure trig­gered a pay­ment Orex­i­gen could not af­ford.

Michael Narachi

“While we have been work­ing close­ly with our note­hold­ers and have the sup­port of a con­trol­ling num­ber of se­nior se­cured note­hold­ers, our debt covenant re­quire­ments and near-term cash flow needs have ne­ces­si­tat­ed the pro­tec­tion af­ford­ed by a court-dri­ven process,” said Michael Narachi, Orex­i­gen’s CEO, in a state­ment.

The past few years have been tu­mul­tuous for Orex­i­gen, with the com­pa­ny’s stock plum­met­ing 96% 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 is 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 has been inch­ing — al­beit slow­ly — to­wards prof­itabil­i­ty for the past 15 years. It wasn’t enough.

Late last year, 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. Plus, the com­pa­ny re­cent­ly won its long patent bat­tle with gener­ic drug­mak­er Ac­tavis, giv­ing Orex­i­gen mar­ket ex­clu­siv­i­ty un­til 2030. Narachi was hope­ful that this de­vel­op­ment would sweet­en the pot for po­ten­tial buy­ers.

No dice, ap­par­ent­ly.

In a state­ment, Orex­i­gen said a con­trol­ling num­ber of its se­nior se­cured note­hold­ers made a $35 mil­lion com­mit­ment to the com­pa­ny, pro­vid­ing Orex­i­gen with “suf­fi­cient liq­uid­i­ty to con­duct its busi­ness in an un­in­ter­rupt­ed man­ner, fund its chap­ter 11 case, in­clud­ing the sale of its as­sets, and to con­tin­ue to meet its op­er­a­tional and fi­nan­cial oblig­a­tions.”

Orex­i­gen’s stock is down 17% in pre-mar­ket trad­ing, sell­ing at $1.16 per share.

Scott Gottlieb, AP Images

Scott Got­tlieb is once again join­ing a team that en­joyed good times at the FDA un­der his high-en­er­gy stint at the helm

Right after jumping on Michael Milken’s FasterCures board on Monday, the newly departed FDA commissioner is back today with news about another life sciences board post that gives him a ringside chair to cheer on a lead player in the real-world evidence movement — one with very close ties to the FDA.

Aetion is reporting this morning that Gottlieb is joining their board, a group that includes Mohamad Makhzoumi, a general partner at New Enterprise Associates, where Gottlieb returned after stepping out of his role at the FDA 2 years after he started.

Gottlieb — one of the best connected execs in biopharma — knows this company well. As head of FDA he championed the use of real-world evidence to help guide drug developers and the agency in gaining greater efficiencies, which helped set up Aetion as a high-profile player in the game.

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San Diego cou­ple charged with steal­ing trade se­crets, open­ing Chi­nese biotech as DOJ crack­down con­tin­ues

A San Diego couple has been charged with stealing trade secrets from a US hospital and opening a business based off those secrets in China as the controversial industry-wide crackdown on alleged corporate espionage continues. On the same day, the Department of Justice announced they had arrested Beijing representative Zhongsan Liu for allegedly trying to obtain research visas for government recruiters.

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Deborah Dunsire. Lundbeck

UP­DAT­ED: Deb­o­rah Dun­sire is pay­ing $2B for a chance to leap di­rect­ly in­to a block­buster show­down with a few of the world's biggest phar­ma gi­ants

A year after taking the reins as CEO of Lundbeck, Deborah Dunsire is making a bold bid to beef up the Danish biotech’s portfolio of drugs in what will likely be a direct leap into an intense rivalry with a group of giants now carving up a growing market for new migraine drugs.

Bright and early European time Monday morning the company announced that it will pay up to about $2 billion to buy Alder, a little biotech that is far along the path in developing a quarterly IV formulation of a CGRP drug aimed at cutting back the number of crippling migraines patients experience each month. In a followup call, Dunsire also noted that the company will likely need 200 to 250 reps for this marketing task on both sides of the Atlantic. And analysts were quick to note that the dealmaking at Lundbeck isn’t done, with another $2 billion to $3 billion available for more deals to beef up the pipeline.

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Tower Bridge in London [Shutterstock]

#UK­BIO19: Join GSK’s Hal Bar­ron and a group of top biotech ex­ecs for our 2nd an­nu­al biotech sum­mit in Lon­don

Over the past 10 years I’ve made a point of getting to know the Golden Triangle and the special role the UK biopharma industry plays there in drug development. The concentration of world class research institutes, some of the most accomplished scientists I’ve ever seen at work and a rising tide of global investment cash leaves an impression that there’s much, much more to come as biotech hubs are birthed and nurtured.

UP­DAT­ED: Bio­gen pulls the plug on prized IPF drug from $562M+ Stromedix buy­out

One of Biogen’s attempts to branch out has flopped as the biotech scraps a mid-stage program for idiopathic pulmonary fibrosis.

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Warts for the win: Aclar­is' lead drug clears piv­otal study

Aclaris Therapeutics has found a way to get rid of the warts and all.

The company — which earlier this month decided to focus on its arsenal of kinase inhibitors — on Monday unveiled positive data from a pivotal study testing its lead experimental drug for use in common warts.

The drug, A-101, was tested in a 502-patient study called THWART-2 — patients enrolled had one to six warts before qualifying for the trial. Patients either self-administered A-101 topical solution or a vehicle twice a week over a two-month period. A higher proportion of patients on the drug (a potent hydrogen peroxide topical solution) saw their warts disappear at day 60, versus the vehicle (p<0.0001) — meeting the main goal of the study.  Each secondary endpoint also emerged in favor of A-101, the company said.

Charles Nichols, LSU School of Medicine

Could psy­che­delics tack­le the obe­si­ty cri­sis? A long­time re­searcher in the field says his lat­est mouse study sug­gests po­ten­tial

Psychedelics have experienced a renaissance in recent years amid a torrent of preclinical and clinical research suggesting it might provide a path to treat mood disorders conventional remedies have only scraped at. Now a preclinical trial from a young biotech suggests at least one psychedelic compound has effects beyond the mind, and — if you believe the still very, very early hype — could provide the first single remedy for some of the main complications of obesity.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

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Ac­celeron drops a de­vel­op­ment pro­gram as #2 drug fails to spark func­tion­al ben­e­fits in pa­tients with a rare neu­ro­mus­cu­lar ail­ment

Acceleron is scrapping a muscular dystrophy development program underway for its number 2 drug in the pipeline after pouring over some failed mid-stage secondary data.

Gone is the ACE-083 project in patients with facioscapulohumeral muscular dystrophy. Their drug hit the primary endpoint on building muscle but flopped on key secondaries for functional improvements in patients, which execs felt was vital to the drug’s success.