Arena Pharmaceuticals, Inc.
Apr 23, 2003

Arena Pharmaceuticals Announces Financial Results for the First Quarter of 2003

SAN DIEGO, Apr 23, 2003 /PRNewswire-FirstCall via COMTEX/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported revenues of $5.4 million for the quarter ended March 31, 2003, a 27% increase over revenues of $4.2 million for the quarter ended March 31, 2002. Revenues in the first quarter of 2003 and 2002 were attributable to research funding, milestone payments and technology access and development fees under Arena's collaborations. Arena reported a net loss of $8.8 million, or $.32 per share, for the first quarter of 2003. The net loss included amortization charges totaling $1.4 million. The net loss for the first quarter of 2002 was $6.5 million, or $.24 per share, and included amortization charges totaling $1.1 million.

Research and development expenses totaled $12.1 million in the first quarter of 2003, compared to $8.8 million in the first quarter of 2002. General and administrative expenses totaled $1.9 million in the first quarter of 2003, compared to $1.8 million in the first quarter of 2002.

Cash, cash equivalents and short-term investments totaled $174.3 million at March 31, 2003. Total shares outstanding were 28.5 million at March 31, 2003.

"Our strong revenues together with tighter cost controls have allowed us to maintain our GPCR leadership position," stated Jack Lief, President and Chief Executive Officer of Arena. "I am pleased to report substantial progress in Project Genesis, which has accelerated pharmaceutical discovery opportunities at many new GPCR targets."

Arena is a biopharmaceutical company focused principally 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 more efficiently and effectively identify compounds that may lead to new drugs. Arena focuses its efforts in four major therapeutic areas: metabolic diseases, cardiovascular diseases, central nervous system disorders and inflammatory diseases. In addition, Arena is pursuing an internal drug discovery program that is called Project Genesis. Project Genesis is comprised of the following steps: identifying therapeutically relevant GPCRs; determining expression levels and localization of these GPCRs; using Arena's proprietary technologies for high-throughput screening of these GPCRs against its chemical compound library; and optimizing small molecule leads identified from Arena's chemical library screens into drug candidates. With the completion of the sequencing of the human genome, Arena views Project Genesis as a strategic extension of its scientific and business capabilities that will allow Arena to discover new drug leads at therapeutically relevant GPCRs.

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, internal programs, future achievements, and statements that are not historical facts, including statements which are preceded by the words "intends," "will," "plans," "expects," "anticipates," "estimates," "aims," and "believes," "hopes" 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 milestone or other payments, if any, from new or existing collaborators; future quarterly or annual financial results; and the ability to complete Project Genesis, if at all, within a reasonable time period. 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 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.

     Arena Pharmaceuticals, Inc.
     Condensed Consolidated Statements of Operations

                                                       Three months ended
                                                           March 31,
                                                      2003           2002
                                                  (unaudited)    (unaudited)
     Revenues
       Total revenues                             $5,375,440     $4,240,304

     Expenses

     Research and development                     12,066,112      8,841,060
     General and administrative                    1,885,191      1,769,753
     Amortization of deferred compensation         1,033,966        755,609
     Amortization of acquired technology             405,305        384,249
       Total operating expenses                   15,390,574     11,750,671
     Interest income and other, net                1,203,699      1,040,633

     Net loss                                    $(8,811,435)   $(6,469,734)

     Net loss per share, basic and diluted            $(0.32)        $(0.24)

     Shares used in calculating net loss
      per share, basic and diluted                27,655,967     27,363,447


     Condensed Consolidated Balance Sheet Data

                                                 March 31,     December 31,
                                                    2003           2002
                                                (unaudited)       (Note)
     Assets
      Cash, cash equivalents and
       short-term investments                   $174,300,778   $185,142,885
      Other current assets                         8,621,408      8,166,767
      Land, property and equipment, net           48,210,148     44,073,365
      Acquired technology, investments
       and other assets                           15,963,882     17,507,030
         Total assets                           $247,096,216   $254,890,047
     Liabilities and Stockholders' Equity
      Liabilities                                $12,721,313    $12,838,346
      Stockholders' equity                       234,374,903    242,051,701
         Total liabilities and stockholders'
          equity                                $247,096,216   $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 Web site: www.arenapharm.com for further information.

Arena will be hosting both a telephone and live Internet first quarter 2003 conference call on Thursday, April 24, 2003, at 9:30 a.m. Eastern Time (6:30 a.m. San Diego Time).

Jack Lief, President and Chief Executive Officer, and Joseph Mooney, Chief Financial Officer, will discuss the first quarter 2003 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) 273-9891 (the international dial in number is (651) 224-7582), and specify that you would like to join the "First 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 Web site until May 1, 2003.

For further information, contact: Jack Lief, President & CEO: (858) 453-7200, extension 223 Joseph Mooney, CFO: (858) 453-7200, extension 508

SOURCE Arena Pharmaceuticals, Inc.