Orexigen Therapeutics (OREX)

Comparison of three months ended March 31, 2009 to three months ended March 31, 2008

Revenues. Revenues for each of the three months ended March 31, 2009 and March 31, 2008 were $22,000, and were related to our sublicensed technology to Cypress.

Research and Development Expenses. Research and development expenses decreased to $15.7 million for the three months ended March 31, 2009 from $20.7 million for the comparable period during 2008. This decrease of approximately $5.0 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 $5.9 million. The decrease in research and development expenses was partially offset by an increase in salaries and personnel related costs totaling approximately $594,000.

General and Administrative Expenses. General and administrative expenses increased to $3.4 million for the three months ended March 31, 2009 from $3.3 million for the comparable period during 2008. This increase of $46,000 was due primarily to an increase in salaries and personnel related costs, including relocation, of $346,000, an increase in recruiting expense of $210,000 and an increase in facilities costs totaling $175,000. The increase in general and administrative expenses was partially offset by a decrease in legal and accounting fees of approximately $405,000 and a decrease in stock-based compensation expense of $302,000.

Interest and Other Income. Interest income decreased to $165,000 for the three months ended March 31, 2009 from $1.2 million for the comparable period during 2008. This decrease of approximately $1.0 million was due to the decrease in average cash and investment balances and lower interest rates as compared to the same period in 2008.

Interest Expense. Interest expense decreased to $394,000 for the three months ended March 31, 2009 from $429,000 for the comparable period during 2008. This decrease was primarily due to a decrease in interest expense incurred on the $23.8 million borrowed under the credit and security agreement as of March 31, 2009.