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SEC Filings

10-Q
OREXIGEN THERAPEUTICS, INC. filed this Form 10-Q on 05/12/2017
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was due primarily to a decrease in expenses in connection with our Contrave CVOT, related proprietary product formulation work and consulting activities of $4.1 million and a decrease in stock-based compensation of $376,000.  These decreases were partially offset by increases in regulatory filings expenses of $645,000.

Selling, General and Administrative Expenses. Sales, general and administrative expenses increased to $55.2 million for the three months ended March 31, 2017 from $16.6 million for the comparable period during 2016. Specifically, sales and marketing costs were $46.0 million and $4.2 million for the three months ended March 31, 2017 and 2016, respectively. General and administrative costs were $9.3 million and $12.4 million for the three months ended March 31, 2017 and 2016, respectively. This overall SG&A increase of approximately $38.6 million was due primarily to an increase in sales and marketing department costs of $41.8 million to establish sales, marketing and distribution capabilities in order to commercialize Contrave. This increase in sales and marketing department costs included an increase of $24.0 million advertising expenses, an increase of $8.6 million in contract sales expenses and an increase in salaries and personnel related costs of $4.6 million. These increases were partially offset by a decrease in general and administrative costs, primarily due to a decrease in legal fees of $4.1 million.

Amortization Expense of Intangible Assets.  The Company acquired developed technology and tradenames in connection with its acquisition of the Contrave business from Takeda effective August 1, 2016.  Amortization expense was approximately $2.0 million for the three months ended March 31, 2017.

Change in Fair Value of Contingent Consideration.  The change in fair value of contingent consideration related to the Takeda business combination was $1.4 million for the three months ended March 31, 2017 and is due to the increased probabilities of the achievement of the contingencies and the passage of time under net present value.

Interest Income.  Interest income increased to $147,000 for the three months ended March 31, 2017 from $123,000 in 2016. This increase of approximately $24,000 was primarily due to an increase in average investment balances and higher interest rates as compared to 2016.

Interest Expense.  Interest expense decreased to $1.2 million for the three months ended March 31, 2017 from $1.9 million in 2016, primarily due to the extinguishment of debt in December 2016.

Change in Fair Value of Financial Instruments.  The change in fair value of financial instruments was $28.0 million for the three months ended March 31, 2017 reflecting the change in fair value of the convertible debt issued in March 2016 and the change in the fair value of the 2017 Exchange Notes from February 2017 to March 2017.

Gain on Extinguishment of Debt.  In February 2017, the Company exchanged approximately $49.6 million in aggregate of principal amount of 2013 Notes for 2017 Exchange Notes.  As a result of the note exchange, the Company recorded a gain on extinguishment of debt of approximately $12.3 million during the three months ended March 31, 2017.

Foreign Currency Gain (Loss), net.  Foreign currency gain, net decreased to $1.5 million for the three months ended March 31, 2017 from $2.8 million for the same period in 2016. This increase was primarily due to the fluctuation in the Euro.

Liquidity and Capital Resources

Since inception, our operations have been financed primarily through the sale of equity and convertible debt securities. Through March 31, 2017, we received net proceeds of approximately $798.3 million from the issuance of equity and convertible debt securities as follows:

 

from September 12, 2002 to December 31, 2006, we issued and sold a total of 105,357 shares of common stock for aggregate net proceeds of $14,801;

 

in March 2004, we issued and sold a total of 932,204 shares of Series A redeemable convertible preferred stock for aggregate net proceeds of $9.2 million and the conversion of promissory notes and interest thereon totaling $1.7 million;

 

from April 2005 to May 2005, we issued and sold 1,483,051 shares of Series B redeemable convertible preferred stock for aggregate net proceeds of $34.9 million;

 

in November 2006, we issued and sold a total of 877,193 shares of Series C convertible preferred stock for aggregate net proceeds of $29.9 million;

 

in May 2007, we issued and sold a total of 805,000 shares of common stock for aggregate net proceeds of $87.9 million;

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