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SEC Filings

S-1/A
OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 04/09/2007
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As of December 31, 2006, we had $19.4 million in cash and cash equivalents and an additional $15 million in investment securities, available-for-sale. We have invested a substantial portion of our available cash in money market funds placed with reputable financial institutions for which credit loss is not anticipated and in corporate debt obligations. In addition, we have established guidelines relating to diversification and maturities of our investments to preserve principal and maintain liquidity.
 
Net cash used in operating activities was $7.5 million, $8.7 million and $21.8 million for fiscal years ended December 31, 2004, 2005 and 2006, respectively. Net cash used in each of these periods was primarily a result of external research and development expenses, clinical trial costs, personnel-related costs, third-party supplier expenses and professional fees.
 
Net cash used in investing activities was $30,000 and $19.1 million for fiscal years ending December 31, 2004 and 2005, respectively. Net cash used in the 2005 period resulted from net purchases of investment securities totaling $19.0 million and the purchase of equipment of $151,000. Net cash provided by investing activities for the year ended December 31, 2006 was $3.4 million, resulting from net sales of investment securities. Investing activities consist primarily of purchases and sales of marketable securities and capital purchases. Purchases of property and equipment were $0, $151,000 and $427,000 in 2004, 2005 and 2006, respectively.
 
Net cash provided by financing activities was $9.2 million, $34.9 million and $29.1 million for fiscal years ending December 31 2004, 2005 and 2006, respectively. Financing activities consist primarily of the net proceeds from the sale of our preferred stock. In 2004, 2005, and 2006 we received net proceeds from the issuance of preferred stock of $9.2 million, $34.9 million, and $29.9 million respectively.
 
We cannot be certain if, when or to what extent we will receive cash inflows from the commercialization of our product candidates. We expect our development expenses to be substantial and to increase over the next few years as we continue the advancement of our product development programs.
 
As a biopharmaceutical company focused on in-licensing, developing and commercializing proprietary pharmaceutical product candidates, we have entered into license agreements to acquire the rights to develop and commercialize our two product candidates, Contrave and Empatic. Pursuant to these agreements, we obtained exclusive licenses to the patent rights and know-how for selected indications and territories. Under our license agreement with Duke University, we issued 442,624 shares of our common stock in March 2004 and may be required to make future milestone payments totaling up to $1.7 million upon the achievement of various milestones related to regulatory or commercial events. Under our license agreement with Lee Dante, M.D., we issued an option to purchase 73,448 shares of our common stock in April 2004 at an exercise price of $0.10 per share, which expires in April 2014. In April 2006, Dr. Dante exercised options with respect to 35,000 of these shares. We also paid Dr. Dante an upfront fee of $100,000 and may be required to make future milestone payments totaling up to $1.0 million upon the achievement of a milestone related to a regulatory event. Under our license agreement with Oregon Health & Science University, we issued 76,315 shares of our common stock in December 2003 and paid an upfront fee of $65,000. Under these three agreements, we are also obligated to pay royalties on any net sales of the licensed products.
 
Our future capital uses and requirements depend on numerous factors. These factors include but are not limited to the following:
 
  •      the progress of our clinical trials, including expenses to support the trials and milestone payments that may become payable;
 
  •      our ability to establish and maintain strategic collaborations, including licensing and other arrangements;
 
  •      the costs involved in enforcing or defending patent claims or other intellectual property rights;
 
  •      the costs and timing of regulatory approvals;
 
  •      the costs of establishing sales or distribution capabilities;


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