Arena Pharmaceuticals Inc. rose the most in 16 months after the company expanded its marketing agreement with Eisai Co. for the diet drug Belviq and received an upfront payment of $60 million.
Arena climbed 17 percent to $4.79 at the close in New York, the largest single-day increase since June 27, 2012. The drugmaker’s shares have fallen 47 percent this year.
Eisai, based in Tokyo, will now market Belviq in all countries except South Korea, Taiwan, Australia, Israel, and New Zealand, San Diego-based Arena said yesterday in a statement. Last year, Belviq became the first obesity drug to gain U.S. approval in 13 years. Eisai will double the size of Belviq’s sales force in the U.S. to 400 people by December, the companies said in the statement.
“We view the news as a significant positive for Arena, since it secures a partner for Belviq” outside North America, “and at terms that we view as fairly attractive,” Simos Simeonidis, an analyst with Cowen & Co. in New York, said in an investment note today.
The two companies received approval from the Food and Drug Administration in June 2012 to market the diet pill in the U.S. and clearance from the Drug Enforcement Agency to start sales in May.
Eisai reported $5.4 million in Belviq sales for the third quarter, of which Arena got $1.7 million in royalties, based on a 31.5 percent royalty rate, according to Simeonidis.
“Additional work is needed to continue building the weight management market, and we are pleased with Eisai’s commitment to realizing the medical and commercial potential of Belviq,” Jack Lief, Arena’s chief executive officer, said in the statement. “We look forward to the market growth of this important treatment option as we move into 2014.”