Arena Pharmaceuticals, Inc.
Nov 7, 2016

Arena Pharmaceuticals Reports Third Quarter 2016 Financial Results and Provides Corporate Update

- Clinical Data from Phase 2 Development Programs Expected in 2017 -

SAN DIEGO, Nov. 7, 2016 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA), today reported financial results for the third quarter ended September 30, 2016, and provided a corporate update.

 

"This was a highly productive quarter for Arena.  We continue to make significant progress focusing the company on our unpartnered clinical programs and building a high performing product development organization. We have expanded our clinical development and management team to facilitate better execution in a time and cost effective manner," said Amit Munshi, Arena's President and CEO.  "We are enthusiastic about our strategy to focus on our clinical stage programs, with a goal of developing first- or best-in-class assets with our three proprietary compounds which includes evaluating ways to expand their indications. In support of our programs, we have initiated efforts to communicate to the scientific community through an active outreach and publication strategy."

Publications Update

  • Etrasimod (APD334)
    • Presented data on etrasimod's S1P receptor profile at the United European Gastroenterology Week (UEGW) Meeting on October 18, 2016.
    • Received acceptance of four poster presentations at the upcoming Advances in Inflammatory Bowel Diseases 2016 (AIBD) conference, which will be held on December 8-10, 2016.
      • Preclinical Safety Assessment of Etrasimod (APD334), an Oral Sphingosine-1-Phosphate Receptor (S1P) Modulator with a Unique Profile
      • The Sphingosine-1-Phosphate Receptor (S1P) Modulator Etrasimod (APD334) Demonstrates Limited Effects on Heart Rate in Preclinical Testing
      • Safety, Pharmacokinetics and Pharmacodynamics of Etrasimod (APD334), an Oral Selective S1P Receptor Modulator, after Dose-Escalation, in Healthy Volunteers
      • Etrasimod (APD334), a Potent, Selective, Oral S1P Receptor Modulator with Autoimmune Disease-Modifying Activity Exhibiting Favorable PK/PD Properties in Healthy Volunteers

Collaborations Update

  • Eisai, Ltd. and Eisai Inc.
    • On October 3, 2016, Eisai announced the availability of once daily BELVIQ XR® in the US.

Corporate Update

  • Vincent Aurentz was appointed as Executive Vice President and Chief Business Officer, effective August 15, 2016.
  • Beacon Discovery, a privately held drug discovery incubator, was formed as a means to unlock the value of Arena's historical research platform. Beacon focuses on identifying and advancing molecules targeting G-Protein Coupled Receptors, or GCPRs. 

Third Quarter 2016 Financial Results

  • Revenues totaled $19.2 million, including $3.3 million in net product sales of BELVIQ and $11.0 million in milestone payments earned from Eisai for BELVIQ
  • Research and development expenses totaled $17.5 million
  • General and administrative expenses totaled $8.6 million
  • Restructuring charges totaled $0.2 million
  • Net loss attributable to stockholders of Arena was $12.4 million or $0.05 per share
  • At September 30, 2016, cash and cash equivalents totaled $101.6 million and approximately 243 million shares of Arena common stock were outstanding

Conference Call & Webcast Information
The Company will host a conference call and live webcast with the investment community today, Monday, November 7, 2016 at 4:30 p.m. ET to discuss the financial results and provide a corporate update.

When: November 7, 2016, 4:30 p.m. ET
Dial-in: (877) 643-7155 (United States) or (914) 495-8552 (International)
Conference ID: Arena Pharmaceuticals Third Quarter 2016 Conference Call

Please join the conference call at least 10 minutes early to register.

You can access the live webcast under the investor relations section of Arena's website at:  www.arenapharm.com.  A replay of the conference call will be archived under the investor relations section of Arena's website for 30 days shortly after the call.

About Arena Pharmaceuticals
We are a biopharmaceutical company focused on developing novel, small molecule drugs across a range of therapeutic areas.  We have three primary proprietary investigational clinical programs: etrasimod (APD334) in Phase 2 evaluation for ulcerative colitis, APD371 entering Phase 2 evaluation for the treatment of pain associated with Crohn's disease, and ralinepag (APD811) in Phase 2 evaluation for pulmonary arterial hypertension (PAH).  Additionally, we have collaborations with the following pharmaceutical companies: Eisai Co., Ltd. and Eisai Inc. (commercial stage), Axovant Sciences Ltd. (Phase 2 candidate), and Boehringer Ingelheim International GmbH (preclinical candidate).

Our US operations are located in San Diego, California. Our primary clinical operations are located in Zug, Switzerland, and our commercial manufacturing for BELVIQ is located in Zofingen, Switzerland.

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 the focus and goals of Arena's organization; Arena's plans and strategy; and Arena's clinical programs. 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. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the following:  the risk that we may need additional funds to advance all of our programs, and you and others may not agree with the manner we allocate our resources; risks related to developing and commercializing drugs; cash and revenues generated from BELVIQ, including the impact of competition; the risk that Arena's revenues are based in part on estimates, judgment and accounting policies, and incorrect estimates or disagreement regarding estimates or accounting policies may result in changes to Arena's guidance or previously reported results; the timing and outcome of development and regulatory review is uncertain, and our drug candidates may not be approved for marketing; regulatory decisions in one territory may impact other regulatory decisions and Arena's business prospects; government and commercial reimbursement and pricing decisions; risks related to relying on collaborative arrangements; the timing and receipt of payments and fees, if any, from collaborators; the entry into or modification or termination of collaborative arrangements; unexpected or unfavorable new data; nonclinical and clinical data is voluminous and detailed, and regulatory agencies may interpret or weigh the importance of data differently and reach different conclusions than Arena or others, request additional information, have additional recommendations or change their guidance or requirements before or after approval; data and other information related to any of Arena's research and development may not meet regulatory requirements or otherwise be sufficient for Arena or a collaborator to pursue further research and development, regulatory review or approval or continued marketing; Arena's and third parties' intellectual property rights; the timing, success and cost of Arena's research and development and related strategy and decisions; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; clinical trials and other studies may not proceed at the time or in the manner expected or at all; and satisfactory resolution of litigation or other disagreements with others. Additional 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 filings with the Securities and Exchange Commission. These forward-looking statements represent Arena's judgment as of the time of this release. Arena disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.

Contact:
Kevin R. Lind, Chief Financial Officer
klind@arenapharm.com 
858.210.3636

(Tables Follow)

 

Arena Pharmaceuticals, Inc.

 

Condensed Consolidated Statements of Operations

 

 

(In thousands, except per share amounts)

 
   
 

Three months ended

 

Nine months ended

 
 

September 30,

 

September 30,

 
 

2016

 

2015

 

2016

 

2015

 
 

(unaudited)

 

(unaudited)

 

Revenues

               

Net product sales

$     3,323

 

$     4,884

 

$   11,104

 

$    15,787

 

Other Eisai collaboration revenue

12,954

 

2,065

 

18,155

 

7,414

 

Toll manufacturing

1,228

 

1,463

 

3,276

 

3,199

 

Other collaboration revenue

1,737

 

726

 

6,066

 

4,175

 

  Total revenues

19,242

 

9,138

 

38,601

 

30,575

 
                 

Operating Costs & Expenses

               

Cost of product sales

882

 

1,635

 

4,161

 

6,129

 

Cost of toll manufacturing

1,930

 

1,584

 

4,876

 

3,798

 

Research & development

17,466

 

22,072

 

54,514

 

68,241

 

General & administrative

8,590

 

9,028

 

23,979

 

26,311

 

Restructuring charges

231

 

0

 

6,346

 

0

 

  Total operating costs & expenses

29,099

 

34,319

 

93,876

 

104,479

 
                 

Interest & Other Income (Expense)

               

Interest income

54

 

37

 

247

 

105

 

Interest expense

(1,609)

 

(1,683)

 

(4,907)

 

(5,133)

 

Gain from valuation of derivative liabilities

0

 

852

 

0

 

474

 

Other

(1,067)

 

(443)

 

(1,275)

 

938

 

  Total interest & other expense, net

(2,622)

 

(1,237)

 

(5,935)

 

(3,616)

 

Net loss

(12,479)

 

(26,418)

 

(61,210)

 

(77,520)

 

Less net loss attributable to noncontrolling interest in consolidated variable interest entity

122

 

0

 

122

 

0

 

Net loss attributable to stockholders of Arena

$  (12,357)

 

$  (26,418)

 

$   (61,088)

 

$  (77,520)

 
                 

Net loss attributable to stockholders of Arena per share:

               

   Basic

$     (0.05)

 

$     (0.11)

 

$      (0.25)

 

$      (0.32)

 

   Diluted

$     (0.05)

 

$     (0.11)

 

$      (0.25)

 

$      (0.32)

 
                 

Shares used in calculating net loss attributable to stockholders of Arena per share:

               

   Basic

243,254

 

242,257

 

243,069

 

240,033

 

   Diluted

243,254

 

242,257

 

243,069

 

240,033

 
                 

 

Arena Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheet Data

(In thousands)

         
         
 

September 30, 2016

 

December 31, 2015

 
 

(unaudited)

 

1

 

Assets

       

  Cash & cash equivalents

$ 101,629

 

$ 156,184

 

  Accounts receivable

18,304

 

4,934

 

  Inventory

10,166

 

9,502

 

  Prepaid expenses & other current assets

4,768

 

4,218

 

  Land, property & equipment, net

64,980

 

71,828

 

  Intangibles & other non-current assets

10,401

 

10,126

 

       Total assets

$ 210,248

 

$ 256,792

 
         

Liabilities & Equity

       

  Accounts payable & accrued liabilities

$   34,608

 

$   25,493

 

  Total deferred revenues

104,654

 

109,042

 

  Total lease financing obligations & other long-term liabilities

66,909

 

68,715

 

  Total equity

4,077

 

53,542

 

       Total liabilities & equity

$ 210,248

 

$ 256,792

 
 

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

 

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SOURCE Arena Pharmaceuticals, Inc.

 

 

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