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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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We are combining drugs in novel combinations and cannot be sure that the combined drugs can co-exist for extended periods in close proximity.
 
Bupropion, which is an API in both Contrave and Empatic, is known to have issues with stability that require manufacturing processes which minimize exposure to moisture and limit oxidation. Naltrexone, which is an API in our Contrave product candidate, contains water within its crystal structure and we would expect Contrave to come into contact with additional moisture through normal use. We are performing stability testing to ensure that our combination tablet of Contrave has sufficient stability to provide the customary two-year stability characteristics and shelf life expected of a conventional pharmaceutical product. Although we are currently conducting stability studies, we cannot be sure that either Contrave or Empatic will be stable, and we may not be able to demonstrate sufficient long term stability to provide at least two years of shelf life for these product candidates, which could jeopardize our ability to bring such product candidates to market.
 
We face potential product liability exposure, and, if successful claims are brought against us, we may incur substantial liability.
 
The use of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval expose us to the risk of product liability claims. Product liability claims might be brought against us by consumers, health care providers, pharmaceutical companies or others selling or otherwise coming into contact with our products. If we cannot successfully defend ourselves against product liability claims, we could incur substantial liabilities. In addition, regardless of merit or eventual outcome, product liability claims may result in:
 
  •      decreased demand for our product candidates;
 
  •      impairment of our business reputation;
 
  •      withdrawal of clinical trial participants;
 
  •      costs of related litigation;
 
  •      distraction of management’s attention from our primary business;
 
  •      substantial monetary awards to patients or other claimants;
 
  •      loss of revenues; and
 
  •      the inability to commercialize our product candidates.
 
We have obtained product liability insurance coverage for our clinical trials with a $10 million annual aggregate coverage limit. Our insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If and when we obtain marketing approval for any of our product candidates, we intend to expand our insurance coverage to include the sale of commercial products; however, we may be unable to obtain this product liability insurance on commercially reasonable terms. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A successful product liability claim or series of claims brought against us could cause our stock price to decline and, if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.
 
If any of our product candidates for which we receive regulatory approval does not achieve broad market acceptance, the revenues that we generate from their sales will be limited.
 
The commercial success of our product candidates for which we obtain marketing approval from the FDA or other regulatory authorities will depend upon the acceptance of these products by the medical community. Coverage and reimbursement of our product candidates by third-party payors, including


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