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SEC Filings

S-1/A
OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 02/16/2007
Entire Document
 
Table of Contents

 
OREXIGEN THERAPEUTICS, INC.
(a development stage company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

 
In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies to other accounting pronouncements that require or permit fair value measurements. The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, and for interim periods within those fiscal years. The Company is currently evaluating the requirements of SFAS 157; however, it does not believe that its adoption will have a material effect on its financial statements.
 
In September 2006, the staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). SAB 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of determining whether the current year’s financial statements are materially misstated. SAB 108 is effective for the Company’s fiscal year beginning January 1, 2007, however, the Company does not believe that its adoption will have an effect on its financial statements.
 
3.   Commitments and Contingencies
 
Technology and License Agreements
 
Oregon Health & Science University
 
In June 2003, the Company entered into a license agreement with Oregon Health & Science University (“OHSU”) whereby the Company acquired an assignment of any rights OHSU may have to a U.S. provisional patent application and OHSU licensed to the Company, on a co-exclusive basis, an issued patent. As consideration for this license agreement, the Company paid an upfront fee of $65,000 and issued 152,630 shares of the Company’s common stock to OHSU. In addition, pursuant to the agreement, the Company was required to make a payment of $20,000 upon receipt of a pair of mice, a payment of an additional $20,000 upon receipt of any additional pair of mice and a payment of 50% of expenses incurred in the maintenance and prosecution of the licensed issued patent. As of December 31, 2006, the Company has paid a total of $33,604 in connection with the maintenance and prosecution of the patent, of which $3,298 was paid during 2006 and at this time, the Company is not aware of any significant future costs which may arise. The Company is also required to pay a royalty on net sales for each licensed product covered by one of the licensed patents. At December 31, 2006, no royalty payments have been made or are payable under this agreement as the product has not been launched and sales have not commenced.
 
The term of the agreement generally extends until the last of the subject patent rights expire, which is expected to occur in 2024 assuming patents issue with respect to the Company’s pending Weber/Cowley patent applications. The Company may unilaterally terminate the agreement and/or any licenses in any country upon specified written notice to OHSU. OHSU may terminate the agreement upon delivery of written notice if the Company commits a material breach of its obligations and fails to remedy the breach within a specified period or may immediately terminate the agreement upon the delivery of written notice concerning the occurrence of specified bankruptcy proceedings. In addition, upon written notice and the Company’s failure to remedy any of the following breaches within a specified period, OHSU may terminate or modify the agreement: if the Company cannot demonstrate to OHSU’s satisfaction that it has taken, or can be expected to take within a reasonable time, effective steps to achieve practical application of the licensed products and/or licensed processes; or if the Company has willfully made a false statement of, or willfully omitted, a material fact in any report required by the agreement; or if the Company commits a substantial breach of a covenant or agreement contained in the license.


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