Arena Pharmaceuticals, Inc.
Aug 12, 2003

Arena Pharmaceuticals Reports 2003 Second Quarter and Six Months Results

SAN DIEGO, Aug 12, 2003 /PRNewswire-FirstCall via COMTEX/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported revenues of $3.0 million for the quarter ended June 30, 2003, compared to second quarter 2002 revenues of $5.8 million, and $8.3 million in revenues for the six months ended June 30, 2003, compared to $10.1 million in revenues for the six months ended June 30, 2002. Arena earns revenues under its collaborations primarily from research funding, milestone payments, and technology access and development fees. Arena reported a net loss for the second quarter and first half of 2003 of $11.8 million, or $.42 per share, and $20.6 million, or $.74 per share, respectively. This compares with a net loss for the second quarter and first half of 2002 of $7.3 million, or $.27 per share, and $13.8 million, or $.50 per share, respectively.

Research and development expenses totaled $13.1 million in the second quarter of 2003, compared to $10.3 million in the second quarter of 2002. In the six months ended June 30, 2003, research and development expenses totaled $25.2 million, compared to $19.1 million in the six months ended June 30, 2002. General and administrative expenses totaled $2.1 million in the second quarter of 2003, compared to $1.9 million in the second quarter of 2002. In the six months ended June 30, 2003, general and administrative expenses totaled $4.0 million, compared to $3.6 million in the six months ended June 30, 2002.

Cash, cash equivalents and short-term investments totaled $160.1 million at June 30, 2003. Total shares outstanding were 28.6 million at June 30, 2003.

"I am pleased to report that significant progress has been made in many of our research programs," stated Jack Lief, President and Chief Executive Officer of Arena. "In addition, our first clinical candidate for obesity is now undergoing preclinical development studies prior to the expected initiation of a Phase I clinical trial early in 2004."

Arena is a biopharmaceutical company focused on discovering and developing drugs that act on an important class of drug targets called G protein-coupled receptors, or GPCRs. Arena uses its Constitutively Activated Receptor Technology, or CART, Melanophore technology and other proprietary technologies to better understand GPCRs and to efficiently and effectively identify small molecules that may lead to new drugs. Arena focuses its efforts in four therapeutic areas: metabolic diseases, cardiovascular diseases, central nervous system disorders and inflammatory diseases. Within these areas, Arena is developing a portfolio of internally discovered, highly selective small molecules for large markets with unmet medical needs, including obesity, diabetes, depression and sleep disorders.

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, internal programs, future achievements, and statements that are not historical facts, including statements about our ability to identify and develop small molecules or which are preceded by the words "will," "expects" 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 due to risks and uncertainties associated with Arena's business include, but are not limited to, the following: the timing, success and cost of preclinical research, out-licensing endeavors and clinical studies and development; the timing and receipt of additional payments or fees, if any, from new or existing collaborators; the ability to develop small molecules, if at all, within a reasonable time period; and future quarterly or annual financial results. Additional risk factors that could cause actual results to differ materially from those in Arena's forward-looking statements are disclosed in Arena's SEC reports, including, but not limited to, Arena's most recent quarterly report on Form 10-Q. 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.


                         Arena Pharmaceuticals, Inc.
               Condensed Consolidated Statements of Operations

                         Three months ended            Six months ended
                              June 30,                     June 30,
                         2003           2002          2003          2002
                             (unaudited)                 (unaudited)
     Revenues
       Total revenues $2,973,770    $5,829,496     $8,349,210   $10,069,800

     Expenses

     Research and
      development     13,131,197    10,296,001     25,197,309    19,137,061
     General and
      administrative   2,081,980     1,851,731      3,967,171     3,621,484
     Amortization of
      non-cash
      deferred
      compensation       828,684       600,872      1,862,650     1,356,481
     Amortization of
      acquired
      technology         405,305       391,268        810,610       775,517
       Total expenses 16,447,166    13,139,872     31,837,740    24,890,543
     Interest and
      other income,
      net              1,711,081     1,696,738      2,914,780     2,737,371
     Investment
      writedown               --    (1,700,000)            --    (1,700,000)

     Net loss       $(11,762,315)  $(7,313,638)  $(20,573,750) $(13,783,372)

     Net loss per
      share, basic
      and diluted         $(0.42)       $(0.27)        $(0.74)       $(0.50)

     Shares used in
      calculating
      net loss per
      share, basic
      and diluted     27,718,235    27,445,282     27,703,961    27,413,696


                  Condensed Consolidated Balance Sheet Data

                                           June 30,        December 31,
                                             2003              2002
                                         (unaudited)          (Note)
     Assets
       Cash, cash equivalents and
        short-term investments          $160,091,299      $185,142,885
       Other current assets                5,307,921         8,166,767
       Land, property and equipment, net  52,959,857        44,073,365
       Acquired technology, investments
        and other assets                  16,019,963        17,507,030
         Total assets                   $234,379,040      $254,890,047
     Liabilities and
      Stockholders' Equity
       Liabilities                       $10,986,468       $12,838,346
       Stockholders' equity              223,392,572       242,051,701
         Total liabilities and
          stockholders' equity          $234,379,040      $254,890,047

     Note: The Condensed Consolidated Balance Sheet Data at December 31, 2002,
     has been derived from the audited financial statements as of that date.

Arena Pharmaceuticals® and Arena® are registered service marks of the company. CART is an unregistered service mark of the company. Arena's headquarters are at 6166 Nancy Ridge Drive, San Diego, CA 92121, and its telephone number is (858) 453-7200. On the Internet, please refer to Arena's website: www.arenapharm.com for further information.

Arena will be hosting both a telephone and live Internet second quarter 2003 conference call on Tuesday August 12, 2003, at 5:00 p.m. Eastern Time (2:00 p.m. San Diego Time).

Jack Lief, President and Chief Executive Officer, and Joseph Mooney, Chief Financial Officer, will discuss the second quarter results, the progress of Arena's collaborations and other topics. A Question and Answer session will follow the presentation. To access by telephone, dial in toll free at (888) 273-9887 (the international dial in number is (612) 332-0632), and specify that you would like to join the "Second Quarter Earnings Conference Call." To access the call via the Internet, go to www.arenapharm.com and click on "Investor Relations." Then, click on "Calendar of Events." The conference call will be listed at the top of the page. Click on the "Live Webcast" link. Then, follow the links and instructions provided. Listening to the conference call on the Internet will require speakers and Microsoft Windows Media Player. An archive of the webcast will be available on Arena's website until August 19, 2003.

SOURCE Arena Pharmaceuticals, Inc.

Jack Lief, President & CEO, extension 223, or Joseph Mooney, CFO, extension 508, of Arena Pharmaceuticals, Inc., +1-858-453-7200

http://www.arenapharm.com