Sweden's Orexo has suffered a setback on the news that Johnson & Johnson has terminated the firms' anti-inflammatory collaboration.
The pact with the healthcare giant's Janssen Pharmaceuticals unit centred around two projects in the arachidonic acid field. The OX-CLI and OX_ESI programmes was focused on developing treatments for asthma, chronic obstructive pulmonary disease and other inflammatory diseases.
The plug has been pulled on a third undisclosed Janssen programme and each party has regained all commercial rights for its respective projects. Orexo chief executive Anders Lundstrom said J&J's decision is "obviously a disappointment to us" and "unfortunately, we lack the funds to continue on our own to develop the OX-CLI and OX_ESI projects and have therefore decided to close them down".
The original deal, signed in June 2010, could have been worth around $600 million to the Swedish drugmaker. It was originally meant to run for three years over which time Orexo would receive research funding of up to $21.5 million, including an upfront payment of $10 million.
Meantime, Orexo has announced its financials for 2011, which show that revenues slipped to 199.6 million Swedish kroner (about $29.3 million) from 210.5 million kroner. Net loss was 392.0 million kroner and the company ended the year with cash and equivalents of 246.9 million kroner.
Growth is being driven by cancer pain drug Abstral (fentanyl), which is sold by Scotland's ProStrakan. Royalty revenues for the year increased 67% in 2011 to 70.5 million kroner. Mr Lundstrom noted that the US Food and Drug Administration decided in December to approve a common risk management system for all fast-acting fentanyl products, "which means that Abstral, for the first time, will be able to compete on equal terms with other fast- acting fentanyl products in the US market".