Arena Strikes Deal with Eisai to Market Obesity Drug in U.S., Pocketing $50M Upfront

7/1/10Follow @xconomy

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to shift all the costs to their Big Pharma partner, Arena will incur the expenses of manufacturing the drug by maintaining control of that key activity. But since lorcaserin is an oral small molecule, it doesn’t cost nearly as much as most biotech drugs to manufacture, and Arena will easily cover that cost through its sales to Eisai, Lief says. Arena currently has about 80 employees at its Switzerland manufacturing plant, which is located in a Big Pharma talent pool, and has ability to grow.

The plant has capacity to make 1 billion tablets of lorcaserin per year, and Arena hopes to expand the facility’s workforce, and production volumes over time, Lief says. By doing that, Arena will be in a position to strike similar marketing and distribution deals with other drugmakers when it’s ready to tap into markets outside the U.S.

A lot of chess moves are going to be played in the obesity drug market over the coming year, so a lot of questions still can’t be answered. Vivus is first in line for its FDA advisory panel on July 15, which could offer an important preview for investors on the odds that not just Vivus, but Arena and Orexigen will get approved. Arena has struck the first partnership with a big drugmaker with the horsepower to sell an obesity drug, and much has been written about how gun-shy other pharma companies are about obesity given the painful memories of Wyeth’s fen-phen debacle and Sanofi-Aventis’ run-in with rimonabant (Acomplia).

Any drug for obesity, which could be taken by millions of people without an immediately life-threatening condition, is bound to be held to a high safety standard by the FDA. It will be interesting to see which company can pass regulatory scrutiny and get the early upper hand in the marketplace. You can be sure I’ll be watching this story unfold closely over the year to come.

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