Orexigen Up, Then Steeply Down Following Contrave U.S. Rights Agreement

Orexigen Therapeutics, Inc. (NASDAQ: OREX) spiked almost 3 percent to $0.81 early Tuesday, but quickly plummeted more than 6 percent.

The volatility comes on back of news that the pharmaceutical company will be acquiring Contrave®, the "market leading national branded prescription treatment option […] for chronic weight management."

According to the press release, "Orexigen Therapeutics Inc. (OREX) and Takeda Pharmaceuticals U.S.A., Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited (TSE: 4502) (collectively ‘Takeda'), today (Tuesday) announced they have agreed to terminate the Amended and Restated Collaboration Agreement for CONTRAVE®."

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What It Means For Orexigen And Takeda

The press release emphasized how this acquisition should "greatly increase long-term potential corporate profitability," while also creating multiple means of value growth for shareholders.

For Takeda, the acquisition will not influence its FY15 forecast, but will result in a shift of focus for the company, where it "will increase its promotional resources and support towards recent launches in the inflammatory bowel disease and major depressive disorder area."

At the time of writing, Orexigen was down 8 percent on the day at $0.644.

Takeda Pharmaceutical Co Ltd (ADR) (OTC: TKPYY) was essentially flat on the day, trading at $24.15, while Takeda Pharmaceutical Co Ltd (TYO: 4502) was down 0.37 percent at 5,451.00JPY.