Orexo enters into an alliance and license agreement for new drugs to treat respiratory diseases

Orexo enters into an alliance and license agreement for new drugs to
treat respiratory diseases

Uppsala, Sweden, June 1 2010 - Orexo (OMX: ORX) has entered a research
and development alliance and license agreement with Ortho-McNeil-Janssen
Pharmaceuticals, Inc. and Janssen Pharmaceutica NV (collectively “OMJ”).
The licenses granted to OMJ under the agreement include worldwide
licenses to Orexo's ongoing OX-CLI and OX-ESI programs focusing on
discovering and developing innovative small-molecule treatments for
asthma, chronic obstructive pulmonary disease, and other inflammatory
diseases. In addition, OMJ will add a third internal program focusing on
discovering and developing innovative small-molecules against an
undisclosed target to the alliance on the same financial terms.

  · Initially, the agreement will run for three years, with an option
for OMJ to extend the alliance and funding.
  · To Orexo, the alliance will bring a research funding contribution of
up to USD 21.5 million (SEK 167 million) over the first three years,
including an upfront payment of USD 10 million (SEK 77.8 million).
  · Upon the successful development and commercialization of all three
initial alliance programs for multiple indications, Orexo will be
entitled to total development milestone payments of up to USD 564
million (SEK 4,390 million), plus additional sales milestones for each
program. Commercialized products will also provide royalties.
  · In addition, the agreement grants Orexo an option for rights to
co-promote drugs from the programs marketed by OMJ in Nordic and Baltic
countries.
  · OMJ will be responsible for all clinical development and
commercialization activities, including costs.

The alliance will leverage Orexo's world-leading expertise in the
arachidonic acid field and its two advanced pre-clinical programs aimed
at developing powerful new drugs in the fight against serious
respiratory illnesses.

Torbjörn Bjerke, President and CEO of Orexo, said:
“I am delighted to announce this exciting alliance with OMJ in the area
of new drug discovery and development. There are significant medical
needs in the fields of respiratory and inflammatory diseases. We believe
that our research and development is of the highest international
standards. We look forward to further demonstrating our capabilities
through this alliance. By combining our skills and resources in this
area, we look to discover and develop potential new drugs for millions
of patients. This agreement adds to the other good alliances we have
made and is an important element for Orexo in becoming a profitable
pharmaceutical company.”

In accordance with international financial reporting and accounting
standards, the revenues from the upfront payment of USD 10 million will
be recognised in the company's profit & loss account evenly over a
36-month period.

For further information, contact:
Torbjörn Bjerke, President and CEO, Orexo AB
Tel: +46 (0)708-661990
E-mail: torbjorn.bjerke@orexo.com (torbjorn.bjerke@orexo.com)

Claes Wenthzel, Executive Vice President and CFO, Orexo AB
Tel: +46 (0)708-620122
E-mail: claes.wenthzel@orexo.com (claes.wenthzel@orexo.com)

Robin Wright, SVP and Head of Corporate Development, Orexo AB
Tel: +44 7720 300025
E-mail: robin.wright@orexo.com (robin.wright@orexo.com)

About arachidonic acid
Arachidonic acid, which is an essential fatty acid, is important for
many different processes in the body. When cells are activated by
certain external and internal stimuli, arachidonic acid is transformed
into various compounds forming a family of biologically active
substances (mediators), such as prostaglandins, leukotrienes and eoxins.
These mediators are involved in various types of diseases, particularly
inflammatory diseases. Prostaglandins play an important role in the
regulation of blood pressure and blood coagulation, but can also cause
inflammation, pain and fever. Leukotrienes can cause asthmatic symptoms
such as bronchial contractions, swelling and mucous formation, which in
turn can result in breathing difficulties. Eoxins are mediators
originally described by Orexo which have been shown to be important in
various inflammatory processes including respiratory inflammation.
Many of the most common drugs currently used to treat inflammatory
diseases affect the formation or effect of prostaglandins and
leukotrienes.

About the respiratory market
Asthma is a chronic inflammatory disease that affects 6-8 percent of the
adult population and is today the most common chronic disease diagnosed
among children with 10% affected. The greatest challenge in asthma
therapy is to find an effective treatment for patients not responding to
today's treatments.

COPD (chronic obstructive pulmonary disease) is a widespread permanent
inflammation of the respiratory passages that results in reduced lung
function. According to the most recent WHO figures, 80 million people
suffer from moderate to severe COPD. By 2030 COPD will become the third
leading cause of death worldwide according to the American National
Heart, Lung and Blood Institute. Management of acute exacerbations
represents the highest health burden on patients and health service
providers, and remains a key market opportunity for novel efficacious
drugs.

Sales of drugs for respiratory diseases, primarily asthma and COPD,
amounted to approximately US$26 billion in 2009 in the seven largest
national markets. Innovative non-steroidal anti-inflammatory therapies
are seen as the next generation treatment for these diseases.

About Orexo
Orexo is a pharmaceutical company focusing on developing treatments for
pain and inflammation. The company has four products on the market as
well as a broad project portfolio in late stages of development. Sales
and product development are mainly carried out through worldwide
partnership agreements with larger pharmaceutical companies. Orexo´s
most important product is for the management of breakthrough cancer
pain. It is based on Orexo's unique and patented sublingual tablet
technology in which a rapidly disintegrating tablet is placed under the
tongue and the active substance fentanyl is absorbed by the mucous
membrane. Currently AbstralTM is launched in most of Europe. An NDA for
AbstralTM has been filed in the US and Canada by the partner ProStrakan
and in Japan by the partner Kyowa Hakko Kirin. Orexo has its head office
located in Uppsala, Sweden. More information can be found at
www.orexo.com (http://www.orexo.com).

 

Note:
This is information that Orexo AB (publ.) is required to disclose
pursuant to the Swedish Securities Markets Act. The information was
provided for public release on June 1, 2010 at 08:00 a.m. CET.