By Anne Steele 
 

Orexigen Therapeutics Inc. (OREX) on Tuesday said it tapped Valeant Pharmaceuticals International Inc.'s (VRX) Canada subsidiary to help it win regulatory approval for its controversial obesity drug in Canada and commercialize it there.

Terms of the agreement weren't disclosed. Orexigen shares shot up 14% premarket to $4.35, while Valeant shares slipped 0.8% to $30.

In the deal, Valeant will be responsible for obtaining Canadian regulatory approval as well as all expenses. Orexigen will supply Contrave tablets to Valeant Canada for an agreed transfer price and potential regulatory and sales milestone payments. Orexigen said it expects Valeant to file for regulatory approval by January.

The Orexigen drug has had a bumpy ride. In 2011, the U.S. Food and Drug Administration declined to approve Contrave over concerns that patient pulse rates and blood pressure rose. Orexigen was then required to start a 10,000-patient outcomes study to assess cardiovascular risks before the FDA would consider approval, which finally came in 2014. It was the third in a trio of diet drugs that were approved in the U.S., following a decade in which other diet pills were withdrawn because of safety concerns and no new medicines were endorsed by the FDA.

On Tuesday, Orexigen pointed to recent data from Statistics Canada, which indicate almost two-thirds of Canadian adults are now either overweight or obese.

Orexigen and Valeant in March announced a commercialization agreement for Mysimba--the weight loss drug's name outside the U.S.--in 19 countries in Central and Eastern Europe. The companies anticipate launching Mysimba in 11 countries in the fourth quarter and two additional countries in the first quarter of 2017.

Write to Anne Steele at anne.steele@wsj.com

(END) Dow Jones Newswires

August 30, 2016 10:00 ET (14:00 GMT)

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