SAN DIEGO, Feb. 9, 2011 /PRNewswire/ -- Orexigen® Therapeutics, Inc. (Nasdaq:OREX - News), today announced that it has implemented a corporate realignment of the Company's workforce, resulting in a reduction in staff of approximately 40%, or 23 employees. The Company took these steps due to the Complete Response Letter it received from the U.S. Food and Drug Administration ("FDA") on January 31, 2011 regarding the New Drug Application ("NDA") for Contrave®, the Company's lead product candidate for the treatment of obesity. The Company is in the process of updating its corporate strategy following the receipt of the Complete Response Letter. As part of this process, the Company decided to implement this workforce reduction in an effort to organize around the near-term activities the Company intends to conduct as well as reduce its cash expenditures.
"We continue to believe in the potential of Contrave and look forward to discussions with the FDA," said Mike Narachi, Orexigen CEO. "Unfortunately, given the near term uncertainty of Contrave approval, we felt it prudent to consolidate and focus our resources. We are deeply grateful for the dedication and tremendous effort provided by all of our colleagues who are impacted by this realignment."
The Company expects to incur restructuring charges in the first quarter of 2011 of approximately $2.6 million in connection with one-time employee termination costs, including severance and other benefits. Substantially all of these charges are expected to represent cash expenditures. The Company expects the workforce reduction to reduce annualized cash expenditures by approximately $5.0 million. The Company will provide an update on activities at their Q4 and year-end earnings call in March.
About Orexigen Therapeutics
Orexigen Therapeutics, Inc. is a biopharmaceutical company focused on the treatment of obesity. Further information about the Company can be found at www.orexigen.com.
Forward-Looking Statements Related to Orexigen
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 potential for, and timing of, approval for Contrave and anticipated charges in the first quarter of 2011 and reduction of cash expenditures resulting from the realignment. 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: Orexigen's ability to conduct a preapproval cardiovascular outcomes trial, Orexigen's ability to demonstrate that the risk of major adverse cardiovascular events in overweight and obese subjects treated with Contrave does not adversely affect the product candidate's benefit-risk profile; the potential for early termination of the collaboration agreement between Orexigen and Takeda; the costs and time required to complete additional clinical, non-clinical or other requirements prior to any resubmission of an NDA; the therapeutic and commercial value of Contrave; Orexigen's ability to attract and retain key personnel; Orexigen's ability to maintain sufficient capital; 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 was filed with the Securities Exchange Commission on November 4, 2010 and is 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.