Arena Pharmaceuticals Announces 2000 Second Quarter Results
SAN DIEGO, Sept. 6 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported results for the quarter ended June 30, 2000. During the second quarter 2000, the Company reported revenues of $1.3 million versus no revenues for the second quarter of 1999. Revenues in the second quarter of 2000 were attributable to new collaborations, which included research funding, milestone payments and technology access and development fees. Net loss for the second quarter 2000 was $2.9 million, or $0.21 per share on a pro forma basis, excluding the impact of a $8.2 million or $0.60 per share on a pro forma basis non-cash preferred stock charge related to the issuance of preferred stock in the quarter. In the comparable quarter of 1999, Arena reported a net loss of $2.5 million or $0.32 per share on a pro forma basis. Included in the second quarter 2000 net loss were non-cash charges related to amortization of deferred compensation of $1.4 million; excluding these charges as well as the non-cash preferred stock charge, the net loss was $1.5 million, or $0.11 per share on a pro forma basis.
Revenues for the six months ended June 30, 2000 were $1.3 million compared to no revenues for the six months ended June 30, 1999. Revenues were attributable to new collaborations, which included research funding, milestone payments and technology access and development fees. Net loss for the six months ended June 30, 2000 was $6.0 million, or $0.51 per share on a pro forma basis, excluding the impact of a $22.4 million or $1.92 per share on a pro forma basis non-cash preferred stock charge related to the issuance of preferred stock in the quarter. In the comparable six months of 1999, Arena reported a net loss of $4.5 million or $0.63 per share on a pro forma basis. Included in the six months ended June 30, 2000 net loss were non-cash charges related to amortization of deferred compensation of $1.8 million; excluding these charges as well as the non-cash preferred stock charge, the net loss was $4.2 million, or $0.36 per share on a pro forma basis.
In April 2000, Arena entered into a collaborative agreement with Eli Lilly, one of the world's leading pharmaceutical companies. This collaboration principally focuses on diseases of the central nervous system and endocrine system, as well as cardiovascular diseases. The collaboration may be expanded to other diseases, including cancer. Arena will activate a number of mutually selected G protein-coupled receptors and will provide Eli Lilly with biochemical assays for use in their screening facilities. Arena has received, and will continue to receive, research funding from Eli Lilly for Arena's internal resources committed to these tasks, which will be augmented by substantial resource commitments by Eli Lilly. Under the terms of the agreement, Arena received a one-time up-front payment in which Arena is recognizing ratably over the five-year collaboration term. In the future, Arena may receive up to $1.25 million per receptor based upon milestone payments in connection with the successful application of CART to each receptor, and up to an additional $6.0 million based upon clinical development milestone payments for each drug candidate discovered using CART. Arena may also receive additional milestone and royalty payments associated with the commercialization of drugs discovered using CART, if any. In addition, Arena has entered into other collaborative agreements, including agreements with Taisho Pharmaceutical Co., Ltd. and Fujisawa Pharmaceutical Co., Ltd., regarding the application of CART to G protein-coupled receptors. Arena has received approximately $1.5 million in cash proceeds from Eli Lilly, and approximately $800,000 in cash proceeds from Taisho in the second quarter of 2000.
In addition, on July 28, 2000 the Company completed an Initial Public Offering and on August 10, 2000, Arena's underwriters exercised its over-allotment option in connection with the Initial Public Offering, with total net proceeds to the Company of approximately $114.3 million. The Company intends to utilize its net proceeds for general corporate purposes, including working capital, drug candidate discovery, development and clinical testing using non-partnered G protein-coupled receptor targets, and other research and development and clinical activities.
Arena's CART Technology allows for the direct identification of modulators of G protein-coupled receptors (GPCR) in a ligand-independent manner, making the technology particularly useful with respect to the over 2,000 orphan GPCRs that are estimated to be a part of the human genome. Such ligand independent screening is made possible by genetic alteration of these receptors, using routinely applicable and proprietary genetic cassettes. Arena has established CART Technology collaborations with Eli Lilly and Company, Fujisawa Pharmaceutical Co., Ltd., Taisho Pharmaceutical Co., Ltd., Lexicon Genetics, Inc. and Neurocrine Biosciences, Inc.
The statements made in this press release contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from Arena's expectations. For example, the timing, success and cost of preclinical research, out-licensing endeavors and clinical studies, attainment of milestone payments, if any, from collaborators, and the risk factors listed in Arena's SEC filings including but not limited to its Form S-1, may affect the actual results achieved by Arena. These forward-looking statements represent the company's judgment as of the date of this release. The company disclaims, however, 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, 2000 1999 2000 1999 (unaudited) (unaudited) (unaudited) (unaudited) Revenues Total revenues $1,289,271 $-- $1,289,271 $-- Expenses Research and development 2,681,629 1,767,767 5,080,987 3,544,417 General and administrative 495,672 694,574 919,500 998,970 Amortization of deferred compensation 1,419,565 179,386 1,829,044 179,386 Total expenses 4,596,866 2,641,727 7,829,531 4,722,773 Interest Income 465,939 135,666 623,400 249,591 Interest expense (58,056) (21,594) (117,635) (52,708) Other income 13,630 1,105 26,213 1,105 Total other income and expenses 421,513 115,177 531,978 197,988 Net loss $(2,886,082) $(2,526,550) $(6,008,282) $(4,524,785) Non-cash preferred stock charge (8,203,505) -- (22,391,068) -- Net loss applicable to common stockholders $(11,089,587) $(2,526,550) $(28,399,350) $(4,524,785) Historical net loss per share, basic and diluted $(8.47) $(2.48) $(23.70) $(4.52) Shares used in calculating historical net loss per share, basic and diluted 1,309,968 1,019,375 1,198,238 1,001,625 Pro forma net loss per share $(0.81) $(0.32) $(2.43) $(0.63) Shares used in calculating pro forma net loss per share 13,761,385 7,927,968 11,695,092 7,134,060
|Note:||The loss per share on a pro forma basis assumes the conversion of|
|the redeemable preferred stock into common stock as of the date of|
|issuance. The redeemable preferred stock converted into common stock at|
|the closing of the Company's initial public offering on a one-for-one|
Condensed Consolidated Balance Sheet Data: June 30, December 31, 2000 1999 (Unaudited) Assets Cash and cash equivalents $31,941,743 $5,401,508 Other current assets 274,488 172,052 Property and equipment, net 2,942,498 2,773,382 Other assets 856,325 178,898 Total assets 36,015,054 8,525,840 Liabilities and Stockholders' Deficit Liabilities 5,355,549 4,173,440 Redeemable convertible preferred stock 48,317,013 18,251,949 Stockholders' deficit (17,657,508) (13,899,549) Total liabilities and stockholders' deficit $36,015,054 $8,525,840
"Arena Pharmaceuticals" is a registered U.S. trademark of the company. "Arena" and "CART" are trademarks of the company. Arena's headquarters are located at 6166 Nancy Ridge Drive, San Diego, CA 92121. On the Internet, please refer to the Investor Relation's Center at Arena's website: http://www.arenapharm.com for further information. SOURCE Arena Pharmaceuticals, Inc.
CONTACT: Jack Lief, President & Chief Executive Officer of Arena Pharmaceuticals, 858-453-7200/