Takeda entered into an agreement to exclusively market

Orexigen Therapeutics' experimental obesity treatment Contrave (bupropion/naltrexone), pending approval, in the US, Canada, and Mexico in a deal potentially worth more than $1 billion, the companies reported Thursday.

Under the agreed terms, Takeda will make an upfront payment of $50 million to Orexigen, as well as milestone payments related to regulatory and sales targets.

The Japanese drugmaker will also pay tiered double-digit royalties on net sales to Orexigen, which retained the right to co-promote the product in the US.

A US marketing application for Contrave was submitted in March and is currently under review by the FDA, with an FDA advisory panel review set for December 7, and a decision expected by the agency by the end of January 2011.

Leerink Swann & Co. analyst, Joshua Schimmer, noted that "having a strong partner is very important, assuming a competitive field of obesity drugs," adding that "Takeda has great experience in the metabolic arena and gives them a much more broad-based opportunity to target their patient population.”

In July, Eisai and Arena Pharmaceuticals entered into a similar deal for the latter's investigational obesity drug lorcaserin, which is scheduled to be reviewed by an FDA advisory committee on September 16.

Another experimental weight loss drug, Vivus' Qnexa (phentermine/topiramate), is also under regulatory review in the US, with an FDA panel voting earlier this year not to recommend approval of the drug.

A final decision is expected by October 28.