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Orexigen(R) Therapeutics Announces Second Quarter 2009 Financial Results

SAN DIEGO, Aug. 6 /PRNewswire-FirstCall/ -- Orexigen(R) Therapeutics, Inc. (Nasdaq: OREX), a biopharmaceutical company focused on the treatment of obesity, today announced unaudited financial results for the three months ended June 30, 2009.

Three Months Ended June 30, 2009

As of June 30, 2009, Orexigen held $8.6 million in cash and cash equivalents and an additional $37.4 million in investment securities, available-for-sale. In July 2009, Orexigen completed a public offering, the estimated net proceeds of which totaled $81.6 million. The pro forma balance of cash, cash equivalents and investments, available-for-sale, including the estimated net proceeds of the public offering, is $127.6 million.

For the three months ended June 30, 2009, Orexigen reported a net loss of $17.8 million, or $0.51 per share attributable to common stockholders, as compared to a net loss of $23.1 million, or $0.67 per share attributable to common stockholders, for the comparable period in 2008.

Total operating expenses for the three months ended June 30, 2009 were $17.6 million compared to $23.7 million for the comparable period in 2008. The decreased operating expenses were due primarily to a decrease of $6.3 million in research and development expenses in connection with the completion of the Company's Contrave(R) Phase 3 clinical trials, reduced product formulation work and consulting activities, partially offset by an increase in licensing costs, New Drug Application preparation costs, salaries and personnel related costs. In addition, general and administrative expenses increased approximately $200,000 due primarily to an increase in salaries and personnel related costs.

"The recent completion of the COR Phase 3 program was a major milestone for Orexigen, and the results demonstrate the potential for Contrave to help patients in their battle against obesity," said Mike Narachi, President and CEO of Orexigen. "These results highlight the benefits of Contrave, a novel combination therapy that was specifically designed to address the behavior and reward pathways in the brain that impact one's ability to initiate and sustain weight loss."

Recent Highlights


Orexigen announced that the three remaining Phase 3 trials in the Contrave Obesity Research, or COR, program met their co-primary endpoints. Key top-line data from the COR Phase 3 program include the following:

  • 48.0% and 56.3% of patients on Contrave32(1) in COR-I (NB-301) and COR-II (NB-303) lost at least 5% of their body weight after 56 weeks, approximately three times the placebo categorical response rates of 16.4% and 17.1%, respectively (ITT, p<0.001).
  • Contrave patients in COR-I and COR-II on Contrave32 had mean weight loss of 6.1% and 6.4% after 56 weeks, compared to 1.3% and 1.2% on placebo, respectively (ITT, p<0.001).
  • In the COR-Diabetes (NB-304) trial, 44.5% of patients on Contrave32 lost greater than or equal to 5% of their body weight after 56 weeks, more than double the 18.9% of patients on placebo (p<0.001). Contrave patients also showed a 0.6% reduction in HbA1c from baseline, compared to a 0.1% reduction in placebo. This difference of 0.5% is clinically and statistically significant (ITT, p<0.001).
  • Key secondary endpoints met in the COR Phase 3 program included significant improvements in cardiovascular and metabolic risk factors such as waist circumference, visceral fat, HDL cholesterol and triglycerides.
  • Additional analyses indicate that Contrave patients experienced reductions in the frequency and strength of food cravings and an increased ability to control their eating compared to placebo.
  • Contrave was generally well tolerated by patients across the COR Phase 3 program. The COR program data continue to be analyzed and compiled for submission to relevant scientific conferences, peer-reviewed journals and regulatory agencies.

These results build on the positive results of the COR-BMOD (NB-302) trial announced in January 2009. The results from the successfully completed COR program of more than 4,500 patients exceed the FDA categorical efficacy benchmark for clinically significant weight loss, supporting the Company's plan to file a New Drug Application with the US FDA in the first half of 2010.


Orexigen has recently completed treating patients in a Phase 2b clinical trial of Empatic, ZB-202. The Company expects the results of this clinical trial to be announced in the second half of 2009. The trial is designed to build on the results from the previous Phase 2b trial of Empatic, ZB-201. In the current trial, which measures weight loss after 24 weeks of treatment, two different dosages of the Empatic combination are being studied along with the individual constituents. If approved, Empatic may complement the Contrave profile and allow Orexigen to offer obesity treatments to a broader range of patients.


The Company made several key additions to its leadership team during the quarter, including:

  • Michael Narachi as President and Chief Executive Officer. Throughout his 20 years at Amgen, Mike held various positions including Product Development Team Leader for Neupogen as well as Vice President and General Manager of Amgen's Anemia Business. He is also a director of AMAG Pharmaceuticals, Inc.
  • Michael Scaife, Ph.D. as Senior Vice President of Regulatory Affairs and Product Development, Contrave Program. Dr. Scaife has previously served as Senior Vice President of Global Safety, Regulatory Affairs and Quality for Chiron Biopharma, and in similar roles with Nektar Therapeutics, Elan Pharmaceuticals and Novartis Biopharma.
  • Jay Hagan as Senior Vice President of Corporate Development and Strategy. Jay has spent the bulk of his career at Amgen, including as head of Corporate Development and founder and Managing Director of Amgen Ventures.

Conference Call Today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)

The Orexigen management team will host a teleconference and webcast to discuss the second quarter 2009 financial results and recent business highlights. The live call may be accessed by phone by calling (800) 510-9834 (domestic) or (617) 614-3669 (international), participant code 80431991. The webcast can be accessed live on the investor relations section of the Orexigen web site at, and will be archived for 14 days following the call. The archive may be accessed by calling (888) 286-8010 (domestic) or (617) 801-6888 (international), participant code 65772832.

About Orexigen Therapeutics

Orexigen Therapeutics, Inc. is a biopharmaceutical company focused on the treatment of obesity. The Company's lead investigational product, Contrave, has completed Phase 3 clinical trials and is on track for a regulatory submission with the FDA in the first half of 2010. The Company's second product, Empatic, is in the later stages of Phase 2 clinical development, with results expected in the second half of 2009. Each product candidate is designed to act on a specific group of neurons in the central nervous system with the goal of achieving appetite suppression and sustained weight loss, through combination therapeutic approaches. Further information about the Company can be found at

Forward-Looking Statements

Orexigen cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "indicates," "will," "intends," "potential," "suggests," "assuming," "designed" and similar expressions are intended to identify forward-looking statements. These statements are based on the Company's current beliefs and expectations. These forward-looking statements include statements regarding the efficacy and safety of Contrave(R), the potential for, and timing of, an NDA submission for Contrave, the commercial and therapeutic potential of Contrave, and the potential to obtain regulatory approval for, and effectively treat obesity with, Contrave and Empatic. The inclusion of forward-looking statements should not be regarded as a representation by Orexigen that any of its plans will be achieved. Actual results may differ from those set forth in this release due to the risk and uncertainties inherent in the Orexigen business, including, without limitation: additional analyses of data from the Contrave Phase 3 trials and any other clinical trials of Contrave may produce negative or inconclusive results, or may be inconsistent with previously announced results or previously conducted clinical trials; the FDA may not agree with the Company's interpretation of efficacy and safety results; the FDA's draft guidance on general efficacy benchmarks for weight loss products may not be adopted or may change; earlier clinical trials may not be predictive of future results; Contrave or Empatic may not receive regulatory approval on a timely basis or at all, and the FDA may require Orexigen to complete additional clinical, non-clinical or other requirements prior to the submission or the approval of NDAs for either product candidate; the potential for adverse safety findings relating to Contrave or Empatic to delay or prevent regulatory approval or commercialization, or result in product liability claims, including serious adverse events that are not characterized by clinical investigators as possibly related to Contrave; the third parties on whom Orexigen relies to assist with the development programs for Contrave or Empatic, including clinical investigators, contract laboratories, clinical research organizations and manufacturing organizations, may not successfully carry out their contractual duties or obligations or meet expected deadlines, and the quality or accuracy of the data or materials generated by such third parties may be of insufficient quality to include in the Company's regulatory submissions; the ability of Orexigen and its licensors to obtain, maintain and successfully enforce adequate patent and other intellectual property protection of its product candidates; and other risks described in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Orexigen undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995. Information included herein is based on the Company's review and evaluation of the clinical data. All conclusions and determinations contained herein are subject to the Company's further analysis of the clinical data. The ultimate determination of the safety and efficacy of Contrave and Empatic will be made by the FDA and other relevant regulatory authorities.

                            Orexigen Therapeutics, Inc.
                           (a development stage company)
                                  Balance Sheets
                (In thousands, except share and par value amounts)

                                                    June 30,      December 31,
                                                      2009           2008
                                                      ----           ----
      Current assets:
        Cash and cash equivalents                     $8,573        $45,451
        Investment securities, available-for-sale     37,434         40,716
        Prepaid expenses and other current assets      1,665          1,184
                                                       -----          -----
      Total current assets                            47,672         87,351
      Property and equipment, net                      1,558          2,059
      Restricted cash                                  1,290          1,375
      Other assets                                       785          1,123
                                                         ---          -----
      Total assets                                   $51,305        $91,908
                                                     =======        =======

    Liabilities and stockholders' equity
      Current liabilities:
        Accounts payable and accrued expenses        $15,930        $18,810
        Deferred revenue, current portion                 88             88
        Long-term debt, current portion                7,966          7,591
                                                       -----          -----
      Total current liabilities                       23,984         26,489
      Deferred revenue, less current portion           1,015          1,058
      Long-term debt, less current portion             5,043          8,800
      Other long-term liabilities                      1,791          1,767
      Commitments and contingencies
      Stockholders' equity:
        Preferred stock, $.001 par value,
         10,000,000 shares authorized at
         June 30, 2009 and December 31, 2008;
         no shares issued and outstanding
         at June 30, 2009 and December 31, 2008            -              -
        Common stock, $.001 par value,
         100,000,000 shares authorized at
         June 30, 2009 and December 31, 2008;
         34,661,541 and 34,433,322 shares issued
         and outstanding at June 30, 2009 and
         December 31, 2008, respectively                  35             34
        Additional paid-in capital                   256,677        253,782
        Accumulated other comprehensive income            44            153
        Deficit accumulated during the
         development stage                          (237,284)      (200,175)
                                                    --------       --------
      Total stockholders' equity                      19,472         53,794
                                                      ------         ------
      Total liabilities and stockholders' equity     $51,305        $91,908
                                                     =======        =======

                              Orexigen Therapeutics, Inc.
                             (a development stage company)
                                Statements of Operations
                        (In thousands, except per share amounts)

                                                                Period from
                        Three Months Ended   Six Months Ended  September 12,
                             June 30,             June 30,         2002
                             --------             --------    (Inception) to
                           2009     2008        2009     2008  June 30, 2009
                           ----     ----        ----     ----  -------------
         agreement           $-       $-          $-       $-           $174
         revenue             22       22          44       44            397
                             --       --          --       --            ---
      Total revenues         22       22          44       44            571
      Operating expenses:
        Research and
         development     13,256   19,585      28,987   40,272        198,105
        General and
                          4,297    4,092       7,662    7,411         45,484
                          -----    -----       -----    -----         ------
      Total operating
       expenses          17,553   23,677      36,649   47,683        243,589
                         ------   ------      ------   ------        -------
      Loss from
       operations       (17,531) (23,655)    (36,605) (47,639)      (243,018)
      Other income
        Interest income      83      939         248    2,138          8,927
        Interest expense   (358)    (397)       (752)    (826)        (3,193)
                           ----     ----        ----     ----         ------
      Total other
       income (expense)    (275)     542        (504)   1,312          5,734
                           ----      ---        ----    -----          -----
      Net loss          (17,806) (23,113)    (37,109) (46,327)      (237,284)
      Accretion to
       value of
       preferred stock        -        -           -        -            (78)
      Deemed dividend of
       conversion for
       Series C
       preferred stock        -        -           -        -        (13,860)
                            ---      ---         ---      ---        -------
      Net loss
       attributable to
       stockholders    $(17,806)$(23,113)   $(37,109)$(46,327)     $(251,222)
                        =======  =======     =======  =======       ========

      Net loss per
       attributable to
       stockholders -
       basic and
       diluted          $(0.51)  $(0.67)     $(1.07)  $(1.40)
                         =====    =====       =====    =====
      Shares used in
       computing net
       loss per share
       attributable to
       stockholders -
       and diluted       34,662   34,311      34,637   33,126
                         ======   ======      ======   ======

SOURCE Orexigen Therapeutics, Inc.
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