Orexo Agrees to Pay $4 Million to Resolve DOJ Investigation

Swedish pharmaceutical company Orexo AB has reached a non-binding agreement in principle with the U.S. Department of Justice (DOJ) to resolve a long-standing investigation, bringing an end to a six-year legal inquiry. The agreement, which is still in the final stages of negotiation, marks a significant milestone for the company as it seeks to focus on its future development and research.

Orexo, based in Uppsala, Sweden, announced that under the agreement, the company would agree to pay a total of $4 million in installments over several years. Additionally, the company could be required to make a contingent payment, up to five percent of net sales, in the years 2030-2031, contingent on achieving specific sales targets. These targets are tied to the commercial success of the company's products.

The settlement would take the form of a Non-Prosecution Agreement (NPA) and a separate civil settlement, with no admission of wrongdoing from Orexo or its employees. Once finalized, these agreements would close the DOJ investigation and provide assurance that the company will not face further legal exposure.

Nikolaj Sørensen, President and CEO of Orexo, stated, "The Department of Justice investigation has been ongoing for more than six years. We are pleased that we are close to concluding this matter. While the decision to pursue a settlement is not an admission of any wrongdoing, it is based on the significant costs associated with a prolonged legal process and the need to focus on our core business."

The company expects to recognize a provision for the expected liability of $4 million, reflecting the potential financial impact of the settlement. Further details on the financial implications will be disclosed once a final settlement agreement is reached with the DOJ.

Orexo's progress in resolving this investigation is expected to have a positive impact on its financial statements. The company is also investigating the possibility of seeking insurance coverage for the full settlement amount for two former employees who have reached agreements in principle with the DOJ to resolve civil claims.

"We are committed to maintaining our focus on research and development, and this settlement is a testament to our ongoing efforts to ensure compliance and uphold the integrity of our operations," Sørensen added.

Orexo, known for its proprietary AmorphOX® drug delivery technology, continues to advance a diverse pipeline of programs in clinical and preclinical development. The company's core mission remains to develop treatments for severe diseases and life-saving rescue medications.

For more information, visit the company’s website at www.orexo.com, or follow Orexo on social media platforms such as X and LinkedIn.