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SEC Filings

OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 02/16/2007
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finished pharmaceutical products incorporating the API for use in our clinical trials. Currently, we have only one supply arrangement for zonisamide API, a component in our Excalia product candidate, one supplier of naltrexone API, a component in our Contrave product candidate, and one supplier of bupropion API, a component in each of our Excalia and our Contrave product candidates.
While a number of manufacturers are FDA qualified to produce zonisamide and bupropion, and we have already entered into negotiations with other suppliers to act as secondary or supplemental suppliers of these ingredients, we may not be successful in securing these additional supply arrangements on a commercially reasonable basis or at all. The failure or inability of our API suppliers to satisfy our API requirements on a timely basis could cause a disruption of our trials and delay our development program.
Synthesis of naltrexone is a multi-step process with a natural opiate starting material, which is a scheduled substance under Drug Enforcement Administration, or DEA, standards due to the addictive nature of the material. As such, manufacturers must be qualified by the DEA. Because of the DEA-related requirements and modest current demand for naltrexone API, there exist few current manufacturers of this API. Therefore, API costs for naltrexone are greater than for the other constituents of our product candidates. Demand for Contrave may require amounts of naltrexone greater than the currently available supply. Any lack of sufficient quantities of naltrexone would limit our ability to complete our planned clinical trials and the commercial launch of Contrave. Although we are evaluating additional possible manufacturers to supplement our current naltrexone manufacturing capacity, including those in South and East Asia, we may not be successful in accessing additional manufacturing supply of naltrexone API or other necessary components of our product candidates at the appropriate quantities, quality or price.
To date, all of our purchases of API have been completed by purchase orders. We have no long-term commitments or supply agreements with any of our API suppliers. Although we may seek to establish long-term supply commitments in the future, we may be required to agree to minimum volume requirements, exclusivity arrangements or other restrictions. We may not be able to enter into long-term agreements on commercially reasonable terms, or at all.
If the contract manufacturers upon whom we rely fail to produce our product candidates in the volumes that we require on a timely basis, or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our product candidates.
We do not currently possess nor do we plan to implement manufacturing processes internally. We currently utilize the services of contract manufacturers to manufacture our clinical supplies. These clinical supplies include the formulations of our product candidates’ components using the API from our API suppliers, the tablets combining those components and the Contrave Titration Packs, Excalia Titration Packs and bottles used to package these tablets for use in clinical trials. To date, all of these contract manufacturers have performed services under short-term purchase orders or similar arrangements. We have no long-term commitments or supply agreements with these contract manufacturers. Recently, the University of Iowa, the manufacturer of our bupropion SR formulation, advised us that it will no longer be able to meet our supply requirements due to its limited capacity. The University of Iowa advised us that it will supply up to six additional batches of bupropion SR, which we believe will be sufficient to meet our requirements for our Contrave and Excalia clinical trials through mid 2007. While we do not have alternate manufacturing plans in place at this time and cannot guarantee that we will have such arrangements in place as and when we need them, we believe that there are other manufacturers capable of meeting our bupropion SR needs within the time frames we will require. We have entered into negotiations with an alternative manufacturer for future supplies of bupropion SR. We will need to demonstrate comparable bioavailability and bioequivalence of the bupropion SR formulation used in clinical trials to date to the bupropion SR formulation we will use going forward.
We intend to eventually transfer the manufacturing of our clinical supplies to larger manufacturers to provide Phase III clinical supplies and commercial scale product. There can be no assurance we will be able to transfer any manufacturing processes to a larger manufacturer. Furthermore, we may be required to agree to