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Orexigen(R) Therapeutics Reports Third Quarter 2010 Financial Results

SAN DIEGO, Nov. 3, 2010 /PRNewswire via COMTEX/ --

Orexigen(R) Therapeutics, Inc. (Nasdaq: OREX), a biopharmaceutical company focused on the treatment of obesity, today announced financial results for the third quarter of 2010. For the quarter ended September 30, 2010, Orexigen reported a net loss of $14.6 million, or $0.31 per share attributable to common stockholders, as compared to a net loss of $14.4 million, or $0.33 per share attributable to common stockholders, for the third quarter of 2009. As of September 30, 2010, Orexigen had $8.4 million in cash and cash equivalents and an additional $92.2 million in marketable securities, for a total of $100.6 million.

"We had previously set three major goals for the Contrave(R) program: partnership, approval and launch," said Michael Narachi, President and CEO of Orexigen. "In the third quarter, we succeeded in executing a North American partnership agreement with Takeda Pharmaceutical Company Limited, which we believe will further our goal of a strong, focused, U.S. market entry for Contrave, if approved. With a partnership in place our attention continues to be on the regulatory review process for Contrave."

Total operating expenses for the third quarter of 2010 were $14.8 million compared to $14.2 million for third quarter of 2009. The increase in operating expenses primarily reflects an increase in license fees, stock-based compensation expense and salaries and personnel related costs, offset partly by a reduction in research and development expenses related to the completion of Contrave Phase 3 clinical trials and completion of the Phase 2 clinical trial for Empatic(TM). Notably, operating expenses in the third quarter included $3.0 million in milestones paid to third parties related to the execution of the Takeda collaboration.

Conference Call Today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)

The Orexigen management team will host a teleconference and webcast to discuss the third quarter 2010 financial results and recent business highlights. The live call may be accessed by phone by calling (800) 884-5695 (domestic) or (617) 786-2960 (international), participant code 70229939. The webcast can be accessed live on the investor relations section of the Orexigen web site at http://www.orexigen.com, and will be archived for 14 days following the call.

About Orexigen Therapeutics

Orexigen Therapeutics, Inc. is a biopharmaceutical company focused on the treatment of obesity. The Company has filed an NDA with the FDA for its lead investigational product, Contrave(R). The U.S. Food and Drug Administration (FDA) has scheduled the Endocrinologic and Metabolic Drugs Advisory Committee meeting on December 7, 2010 and the Prescription Drug User Fee Act (PDUFA) action date has been set for January 31, 2011. The Company's second product, Empatic(TM), has completed Phase 2 clinical development. Each product candidate is designed to act on a specific group of neurons in the central nervous system with the goal of achieving appetite suppression and sustained weight loss, through combination therapeutic approaches. Further information about the Company can be found at www.orexigen.com.

Forward-Looking Statements

Orexigen cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "indicates," "will," "intends," "potential," "suggests," "assuming," "designed" and similar expressions are intended to identify forward-looking statements. These statements are based on the Company's current beliefs and expectations. These forward-looking statements include statements regarding the anticipated action date for the FDA to complete its review of the Contrave NDA and the potential for, and timing of, approval for Contrave. The inclusion of forward-looking statements should not be regarded as a representation by Orexigen that any of its plans will be achieved. Actual results may differ from those set forth in this release due to the risk and uncertainties inherent in the Orexigen business, including, without limitation: risks inherent in the uncertainty of the FDA approval process and other regulatory requirements; the therapeutic and commercial value of Contrave; reliance on third parties to assist with the development of Contrave and the regulatory submissions related thereto; the potential for adverse safety findings relating to Contrave; and other risks described in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Orexigen undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof. Further information regarding these and other risks is included under the heading "Risk Factors" in Orexigen's Quarterly Report on Form 10-Q, which we intend to file with the Securities Exchange Commission this week and will be available from the SEC's website (www.sec.gov) and on our website (www.orexigen.com) under the heading "Investor Relations." All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.

Orexigen Therapeutics, Inc.

(a development stage company)

Balance Sheets

(In thousands, except share and par value amounts)



September 30,


December31,


2010


2009


(Unaudited)



Assets




Current assets:




Cash and cash equivalents

$ 8,372


$ 37,658

Investment securities, available-for-sale

92,233


54,500

Prepaid expenses and other current assets

1,850


1,529

Total current assets

102,455


93,687

Property and equipment, net

990


1,324

Restricted cash

881


1,290

Other assets

299


547

Total assets

$ 104,625


$ 96,848





Liabilities and stockholders' equity




Current liabilities:




Accounts payable and accrued expenses

$ 6,885


$ 9,828

Deferred revenue, current portion

3,517


88

Long-term debt, current portion

3,741


6,384

Total current liabilities

14,143


16,300

Deferred revenue, less current portion

47,190


971

Long-term debt, less current portion

-


2,416

Other long-term liabilities

490


1,258

Commitments and contingencies




Stockholders' equity:




Preferred stock, $.001 par value, 10,000,000 shares




authorized at September 30, 2010 and December 31, 2009; no




shares issued and outstanding at




September 30, 2010 and December 31, 2009

-


-

Common stock, $.001 par value, 100,000,000 shares




authorized at September 30, 2010 and December 31, 2009;




47,556,739 and 47,215,479 shares issued and outstanding




at September 30, 2010 and December 31, 2009, respectively

48


47

Additional paid-in capital

350,115


342,599

Accumulated other comprehensive income (loss)

4


(6)

Deficit accumulated during the development stage

(307,365)


(266,737)

Total stockholders' equity

42,802


75,903

Total liabilities and stockholders' equity

$ 104,625


$ 96,848

Orexigen Therapeutics, Inc.

(a development stage company)

Statements of Operations

(In thousands, except per share amounts)

(Unaudited)










Period from



Three Months Ended


Nine Months Ended


September 12, 2002



September 30,


September 30,


(Inception) to



2010


2009


2010


2009


September 30, 2010

Revenues:














Collaborative agreement


$286


$-


$286


$-


$

460

License revenue


22


22


66


66


507

Total revenues


308


22


352


66


967

Operating expenses:











Research and development


8,186


9,592


21,753


38,579


238,312

General and administrative


6,624


4,592


18,827


12,254


74,826

Total operating expenses


14,810


14,184


40,580


50,833


313,138

Loss from operations


(14,502)


(14,162)


(40,228)


(50,767)


(312,171)

Other income (expense):











Interest income


21


47


101


295


9,113

Interest expense


(165)


(318)


(501)


(1,070)


(4,307)

Total other income (expense)


(144)


(271)


(400)


(775)


4,806

Net loss


(14,646)


(14,433)


(40,628)


(51,542)


(307,365)

Accretion to redemption value of redeemable convertible preferred stock


-


-


-


-


(78)

Deemed dividend of beneficial conversion for Series C preferred stock


-


-


-


-


(13,860)

Net loss attributable to common stockholders


$(14,646)


$(14,433)


$(40,628)


$(51,542)


$

(321,303)














Net loss per share attributable to common stockholders - basic and diluted


$(0.31)


$(0.33)


$(0.86)


$(1.38)



Shares used in computing net loss per share attributable to common stockholders - basic and diluted


47,440


43,087


47,295


37,484



SOURCE Orexigen Therapeutics, Inc.