Arena Pharmaceuticals Inc said Japanese drugmaker Eisai Co Ltd will market its diet drug in most markets worldwide as part of an expanded agreement, under which the companies will also develop the drug for other indications.
Arena shares were up 5 percent in extended trading after closing at $4.08 on the Nasdaq on Thursday.
The U.S. drugmaker will get $60 million upfront and milestone payments of up to $176.5 million to expand an existing marketing agreement for the drug to most markets worldwide, excluding Korea, Taiwan, Australia, Israel and New Zealand.
Eisai already holds marketing rights to the drug, Belviq, in most in North and South America.
Arena will also receive, based on certain conditions, up to about 35 percent of Eisai's net sales on the drug, which last year became the first new diet pill to be approved by U.S. health regulators in 13 years.
Under the deal, the companies will explore the drug as a treatment in such areas as smoking cessation, diabetes and cardiovascular diseases.
Arena is also eligible to receive a total of $1.56 billion in one-time purchase price adjustment payments based on sales, an increase of $185 million from the amount available under the previous agreement.
Sales of Belviq and competitor Qsymia, marketed by Vivus Inc, have so far failed to live up to the lofty expectations that came with their launch.
(Reporting By Adithya Venkatesan; Editing by Anthony Kurian)