Orexigen Therapeutics Inc. (OREX, Financial) filed Quarterly Report for the period ended 2010-06-30.
Orexigen Therapeutics Inc. has a market cap of $243.1 million; its shares were traded at around $5.15 with and P/S ratio of 2763.2. OREX is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jim Simons of Renaissance Technologies LLC.
Research and Development Expenses. Research and development expenses decreased to $5.6 million for the three months ended June 30, 2010 from $13.3 million for the comparable period during 2009. This decrease of approximately $7.7 million was due primarily to a decrease in expenses in connection with our Contrave Phase III clinical trials, related proprietary product formulation work and consulting activities totaling $5.8 million and a decrease in license fees of $2.5 million. The decrease in research and development expenses was partially offset by an increase in salaries and personnel related costs totaling approximately $982,000.
General and Administrative Expenses. General and administrative expenses increased to $6.2 million for the three months ended June 30, 2010 from $4.3 million for the comparable period during 2009. This increase of approximately $1.9 million was due primarily to an increase in salaries and personnel related costs of $500,000, an increase in stock-based compensation expense of $455,000, an increase in medical affairs expense of $287,000 and an increase in market research costs totaling $188,000.
Research and Development Expenses. Research and development expenses decreased to $13.6 million for the six months ended June 30, 2010 from $29.0 million for the comparable period during 2009. This decrease of $15.4 million was due primarily to a decrease in expenses in connection with our Contrave Phase III clinical trials, related proprietary product formulation work and consulting activities totaling $16.7 million and a decrease in license fees of $2.5 million. The decrease in research and development expenses was partly offset by an increase in salaries and personnel related costs totaling approximately $2.2 million and an increase in costs incurred in connection with the preparation for our NDA for Contrave of $1.4 million.
General and Administrative Expenses. General and administrative expenses increased to approximately $12.2 million for the six months ended June 30, 2010 from approximately $7.7 million for the comparable period during 2009. This increase of $4.5 million was due primarily to an increase in salaries and personnel related costs of approximately $1.7 million, an increase in stock-based compensation expense of approximately $1.2 million, an increase in market research costs of $674,000 and an increase in medical affairs expense of $330,000.
We have entered into license agreements to acquire the rights to develop and commercialize Contrave and Empatic. Pursuant to these agreements, we obtained exclusive and non-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. 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. Under our license agreement with SmithKline Beecham Corporation and Glaxo Group Limited, we paid an upfront payment and may be required to make a future milestone payment upon the earliest achievement of certain milestones primarily relating to regulatory or commercial events.
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Orexigen Therapeutics Inc. has a market cap of $243.1 million; its shares were traded at around $5.15 with and P/S ratio of 2763.2. OREX is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
At December 31, 2009, we had federal and state net operating loss carryforwards of approximately $247.9 million and $224.6 million, respectively. The federal and state net operating loss carryforwards begin to expire in 2022 and 2013, respectively, unless previously utilized. At December 31, 2009, we had federal and state research and development tax credit carryforwards of $10.4 million and $2.6 million, respectively. The federal research and development tax credit carryforwards begin to expire in 2023 unless previously utilized and the state tax credits carry forward indefinitely. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, substantial changes in our ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset taxable income. An analysis was performed which indicated that multiple ownership changes have occurred in previous years which created annual limitations on our ability to utilize our net operating loss, or NOL, and tax credit carryovers. Such limitations will result in approximately $945,000 of tax benefits related to NOL and tax credit carryforwards that will expire unused. Accordingly, the related NOL and research and development tax credit carryforwards have been removed from deferred tax assets accompanied by a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact our effective tax rate.Research and Development Expenses. Research and development expenses decreased to $5.6 million for the three months ended June 30, 2010 from $13.3 million for the comparable period during 2009. This decrease of approximately $7.7 million was due primarily to a decrease in expenses in connection with our Contrave Phase III clinical trials, related proprietary product formulation work and consulting activities totaling $5.8 million and a decrease in license fees of $2.5 million. The decrease in research and development expenses was partially offset by an increase in salaries and personnel related costs totaling approximately $982,000.
General and Administrative Expenses. General and administrative expenses increased to $6.2 million for the three months ended June 30, 2010 from $4.3 million for the comparable period during 2009. This increase of approximately $1.9 million was due primarily to an increase in salaries and personnel related costs of $500,000, an increase in stock-based compensation expense of $455,000, an increase in medical affairs expense of $287,000 and an increase in market research costs totaling $188,000.
Research and Development Expenses. Research and development expenses decreased to $13.6 million for the six months ended June 30, 2010 from $29.0 million for the comparable period during 2009. This decrease of $15.4 million was due primarily to a decrease in expenses in connection with our Contrave Phase III clinical trials, related proprietary product formulation work and consulting activities totaling $16.7 million and a decrease in license fees of $2.5 million. The decrease in research and development expenses was partly offset by an increase in salaries and personnel related costs totaling approximately $2.2 million and an increase in costs incurred in connection with the preparation for our NDA for Contrave of $1.4 million.
General and Administrative Expenses. General and administrative expenses increased to approximately $12.2 million for the six months ended June 30, 2010 from approximately $7.7 million for the comparable period during 2009. This increase of $4.5 million was due primarily to an increase in salaries and personnel related costs of approximately $1.7 million, an increase in stock-based compensation expense of approximately $1.2 million, an increase in market research costs of $674,000 and an increase in medical affairs expense of $330,000.
We have entered into license agreements to acquire the rights to develop and commercialize Contrave and Empatic. Pursuant to these agreements, we obtained exclusive and non-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. 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. Under our license agreement with SmithKline Beecham Corporation and Glaxo Group Limited, we paid an upfront payment and may be required to make a future milestone payment upon the earliest achievement of certain milestones primarily relating to regulatory or commercial events.
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