Orexigen Therapeutics, Inc. (NASDAQ:OREX) Looks Good For Further Gains

Orexigen Therapeutics, Inc. (NASDAQ:OREX) is up 130% on its end of December close, with the company announcing that it is set to put out a fresh advertising for its lead (and only, really) product. It's a big run, considering it's just a company saying "we're going to try and sell our product", but there may be something behind it, so let's take a look at what's going on, and try and figure out if there's more upside to come.On January 4, Orexigen announced that it had launched an advertising campaign in partnership with an agency called Young & Rubicam New York, called "Brains Behind Weight Loss". According to company material, the campaign will focus on the education of patients as to the role that the brain plays in losing weight, and maintaining weight loss, as illustrated by various female actors characterizing various parts of the brain associated with the weight loss process.Of course, the commercials will then pivot to focus on how Orexigen's product, a weight loss pharmaceutical called CONTRAVE, plays on each of these elements of the brain, to make it easier for women (mainly, but only because 80% of current CONTRAVE prescriptions are women) to lose weight.For those not familiar with CONTRAVE, it's an FDA approved weight loss therapy, indicated as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults classed (by way of BMI) as obese, or as overweight and suffering from a comorbidity (diabetes, hypertension, that sort of thing). It picked up approval in the US in September 2014 and became the most prescribed branded obesity medication in the June 2015. It's also approved in Europe, under the brand MYSIMBA.Orexigen picked up the US rights to the product in August, in a deal that was delayed, having initially been slated to complete in March. The acquisition of these rights was a pivot for the company.Ingredient wise, it's a mixture of naltrexone, which is traditionally an addition management drug (it reverses opioid overdose) and bupropion, which is an antidepressant. It's the combination of these two active ingredients' impact on parts of the brain that the commercials will focus on.So, is this announcement worth the run? Well, the drug is doing pretty well right now, having generated a little over $7 million sales during the third quarter, but it's the second and first quarters where we generally see a run in these sorts of medications. Why? Because that's when people start to lose weight on the back of New Year's resolutions. This campaign suggests Orexigen is trying to take full advantage of these New Years resolutions to boost its top line (and frankly, we'd be asking questions if it didn’t) and so yes, there may be some run room left. If the campaign is effective, we could be looking at a real jump in first and second quarter revenues. If this last quarter of sales is anything to go by, the coming quarters should be record numbers for the company and there's always upside in a company being able to announce record sales.Management just put out a 2017 business goals update, to set things up for what's going to happen over the next twelve months, but it's not really worth us going in to that in too much detail. Essentially it says Orexigen is focusing on the launch of the drug in a large number of nations and regions. Think of a country or region in North America and Europe, and chances are Orexigen said in its 2017 business goals release that it is going to target the successful launch of CONTRAVE in said region.Cash on hand is very strong for a company of this size, recorded at $239.5 million at September 30, and liabilities sit at $279 million, although the majority of this is long term (and currently serviceable) debt.Bottom line, this one looks interesting. It's basically a fresh company with a lot of cash, a best selling product and plenty of potential regions to target. And it's doing so with a fresh commercial run, at a time of year when people are most receptive to this type of product.We will be updating our subscribers as soon as we know more. For the latest updates on OREX, sign up below!Disclosure: We have no position in OREX and have not been compensated for this article.