Arena Pharmaceuticals, Inc.
Apr 20, 2004

Arena Pharmaceuticals Announces First Quarter 2004 Financial Results

SAN DIEGO, April 20 /PRNewswire-FirstCall/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported financial results for the first quarter of 2004.

Total revenues in the first quarter of 2004 were $5.8 million, compared to $5.4 million in the first quarter of 2003. Arena reported a net loss allocable to common stockholders in the first quarter of 2004 of $12.5 million, or $0.49 per share. This compares with a net loss allocable to common stockholders of $8.8 million, or $0.32 per share for the first quarter of 2003.

Research and development expenses totaled $13.8 million in the first quarter of 2004, compared to $12.1 million in the first quarter of 2003. General and administrative expenses totaled $2.5 million in the first quarter of 2004, compared to $1.9 million in the first quarter of 2003.

Cash, cash equivalents and short-term investments totaled $145.7 million at March 31, 2004.

"The first quarter of 2004 was very significant for Arena. We took another step toward our goal of becoming a pharmaceutical company by entering our first proprietary product for obesity into Phase 1 clinical trials," said Jack Lief, Arena's President and Chief Executive Officer. "Additionally, we achieved a $4 million milestone payment from our Merck collaboration. Throughout the rest of 2004, we look forward to ongoing preclinical and clinical development progress for a number of our compounds, and continuing collaboration efforts with our partners."

First Quarter Highlights:

Selected highlights for the first quarter included:

Arena will be hosting both a conference call and webcast to discuss first quarter 2004 financial results and highlights from the quarter on Wednesday, April 21, 2004, at 9:00 AM Eastern Time (6:00 AM Pacific Time).

The conference call may be accessed by dialing (800) 450-0819 for domestic callers and (612) 332-0342 for international callers. Please specify to the operator that you would like to join the "Arena Pharmaceuticals First Quarter Earnings Conference Call." The conference call will be webcast live on Arena's website at http://www.arenapharm.com, under the investor relations section, and will be archived there for 30 days following the call. Please connect to Arena's website several minutes prior to the start of the conference call to ensure adequate time for any software download that may be necessary.

Arena is a biopharmaceutical company focusing on the discovery, development and commercialization of drugs in four major therapeutic areas: metabolic, cardiovascular, central nervous system and inflammatory diseases. Arena is developing a broad pipeline of compounds including one in Phase 1 clinical trials for obesity and another in preclinical development for insomnia. The company's compounds act on an important class of drug targets called G protein-coupled receptors, or GPCRs, and were developed using Arena's proprietary technologies, including CART (Constitutively Activated Receptor Technology) and Melanophore. Arena also has research collaborations with Merck, Fujisawa, Taisho and TaiGen for products in a number of different indications. For additional information about Arena, please visit their website at http://www.arenapharm.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include statements about Arena's strategy, technologies, preclinical and clinical programs, future achievements, and statements that are not historical facts, including statements about Arena's ability to identify and develop drugs or which are preceded by the word "will" or similar words. For such statements, Arena claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from Arena's expectations. Important factors that could cause actual results to differ materially from those stated or implied by Arena's forward-looking statements are disclosed in Arena's SEC reports, including Arena's most recent annual report on Form 10-K. These forward-looking statements represent Arena's judgment as of the date of this release. Arena disclaims any intent or obligation to update these forward-looking statements.

For further information please contact: Jack Lief of Arena Pharmaceuticals, Inc., +1-858-453-7200 ext. 223; or Susan Neath of Atkins + Associates, +1-858-527-3486, for Arena Pharmaceuticals, Inc.


                           Arena Pharmaceuticals, Inc.
                 Condensed Consolidated Statements of Operations

                                                      Three months ended
                                                          March 31,
                                                     2004          2003
                                                         (unaudited)
    Revenues
         Total revenues                           $5,783,334     $5,375,440

    Expenses

    Research and development                      13,798,027     12,066,112
    General and administrative                     2,546,189      1,885,191
    Amortization of non-cash deferred
     compensation                                    500,628      1,033,966
    Amortization of acquired technology              405,305        405,305
         Total expenses                           17,250,149     15,390,574
    Interest and other income, net                  (222,777)     1,203,699
    Net loss                                     (11,689,592)    (8,811,435)

    Dividends on redeemable convertible
     preferred stock                                (354,914)            --
    Accretion of discount and deemed
     dividend related to redeemable
     convertible preferred stock                    (462,971)            --
    Net loss allocable to common
     stockholders                               $(12,507,477)   $(8,811,435)

    Net loss per share, basic and diluted            $(0.49)        $(0.32)

    Shares used in calculating net loss
     per share, basic and diluted                 25,286,402     27,655,967


                    Condensed Consolidated Balance Sheet Data

                                                 March 31,     December 31,
                                                    2004           2003
                                                (Unaudited)       (Note)
    Assets
      Cash, cash equivalents and
       short-term investments                   $145,657,175   $154,016,883
      Other current assets                         4,526,212      4,758,673
      Land, property and equipment, net           55,572,300     55,729,472
      Acquired technology, investments
       and other assets                           14,489,830     15,393,081
         Total assets                           $220,245,517   $229,898,109
    Liabilities and Stockholders' Equity
      Liabilities                                $22,104,732    $20,973,873
      Redeemable convertible preferred stock      26,620,846     25,776,104
      Stockholders' equity                       171,519,939    183,148,132
         Total liabilities and
          stockholders' equity                  $220,245,517   $229,898,109


    Note: The Condensed Consolidated Balance Sheet Data has been derived
    from the audited financial statements as of that date.


SOURCE: Arena Pharmaceuticals, Inc. 04/20/2004

CONTACT: Jack Lief of Arena Pharmaceuticals, Inc., +1-858-453-7200 ext. 223; or Susan Neath of Atkins + Associates, +1-858-527-3486, for Arena Pharmaceuticals, Inc.

Web site: http://www.arenapharm.com