Arena Pharmaceuticals, Inc.
) recently announced an agreement with Taiwan-based CY Biotech
for the marketing and supply agreement of obesity drug, Belviq,
in Taiwan. As per the agreement, CY Biotech will have marketing
and distribution rights of Belviq in Taiwan for weight loss or
weight management in obese and overweight patients after getting
approval from the Taiwan regulatory body, Taiwan Food and Drug
Belviq will be manufactured at Arena Pharma's production
facility in Switzerland and CY Biotech will purchase the product
at a price of 45% of CY Biotech's annual sales. Additionally, CY
Biotech paid $2 million to Arena Pharma upfront. Arena Pharma
will also receive a milestone payment after the first additional
indication for Belviq is approved by the TFDA. CY Biotech will
shoulder the responsibility of the development and regulatory
approval of Belviq in Taiwan.
We note that Arena Pharma has a marketing and supply
collaboration with Eisai Inc.'s subsidiary, Eisai Limited for the
U.S. and its territories. In 2012, the agreement was amended and
Eisai received commercialization rights in most areas of North
and South America. In Jun 2013, both companies announced the
submission of a marketing application for Belviq for the
treatment of obesity in Canada.
In June 2013, Arena Pharma launched Belviq in the U.S. and
received a milestone payment of $65 million from Eisai. However,
the company has faced some hurdles in gaining approval for Belviq
in the EU. In May 2013, Arena Pharma announced that it has
decided to withdraw its application in the EU. However, the
company plans to file the application again.
The obesity market represents huge commercial potential.
According to the World Health Organization (WHO), the worldwide
obese population has almost doubled since 1980. Furthermore, 1.5
billion people around the globe are overweight with 500 million
falling under the obese category.
Currently approved therapies for obesity include
) Qsymia, which was launched in Sep 2012. Qsymia's sales are yet
to pick up - first quarter 2013 sales were $4.1 million.
Arena Pharma currently carries a Zacks Rank #3 (Hold). At
present, companies like
) look well positioned with a Zacks Rank #1 (Strong Buy).
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