Arena Pharmaceuticals Announces 2000 Third Quarter Results; Sequential Quarterly Revenue Growth of 79%
Revenues for the nine months ended September 30, 2000 were $3.6 million compared to no revenues for the nine months ended September 30, 1999. Revenues were attributable to collaborations, which included research funding, milestone payments and technology access and development fees. Net loss for the nine months ended September 30, 2000 was $7.4 million, or $0.47 per share on a pro forma basis, excluding the impact of a non-cash preferred stock charge related to the issuance of preferred stock in the period of $22.4 million or $1.42 per share on a pro forma basis. In the comparable nine months of 1999, Arena reported a net loss of $7.3 million or $0.98 per share on a pro forma basis. Included in the nine months ended September 30, 2000 net loss were non-cash charges related to amortization of deferred compensation of $3.0 million; excluding these charges as well as the non-cash preferred stock charge, the net loss was $4.5 million, or $0.28 per share on a pro forma basis. Cash and cash equivalents at September 30, 2000 totaled $144.6 million.
"In the third quarter, we completed a successful Initial Public Offering with total net proceeds to the Company of approximately $114 million," stated Jack Lief, Arena's President and CEO. Mr. Lief further noted that "Arena made significant progress towards our goal of sustained profitability by achieving sequential third quarter revenue growth of 79%."
Arena's CART Technology allows for the direct identification of modulators of G protein-coupled receptors (GPCRs) in a ligand-independent manner, making the technology particularly useful with respect to the over 1,900 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 materially from Arena's expectations. Important factors that
could cause actual results to differ materially from those stated or implied by
our forward looking statements due to risks and uncertainties associated with
the Company's business include, but are not limited to, the following: future
quarterly or annual financial results, the timing, success and cost of
preclinical research, out-licensing endeavors and clinical studies, attainment
of milestone payments, if any, from collaborators. Additional risk factors that
could cause actual results to differ materially from those in our forward
looking statements are disclosed in the Company's Form S-1 and most recent
quarterly report on Form 10-Q. 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 Nine months ended September 30, September 30, 2000 1999 2000 1999 (unaudited) (unaudited) (unaudited) (unaudited) Revenues Total revenues $ 2,314,126 $ -- $ 3,603,397 $ -- Expenses Research and development 3,465,360 2,332,866 8,546,347 5,877,283 General and administrative 800,383 378,703 1,719,883 1,377,673 Amortization of deferred compensation 1,123,358 97,628 2,952,402 277,014 Total expenses 5,389,101 2,809,197 13,218,632 7,531,970 Interest income 1,701,698 110,942 2,325,098 360,533 Interest expense (59,448) (38,646) (177,083) (91,354) Other income 14,131 2,796 40,344 3,901 Total other income and expenses 1,656,381 75,092 2,188,359 273,080 Net loss (1,418,594) (2,734,105) (7,426,876) (7,258,890) Non-cash preferred stock charge -- -- (22,391,068) -- Net loss applicable to common stockholders $(1,418,594) $(2,734,105) $(29,817,944) $(7,258,890) Historical net loss per share, basic and diluted $(0.09) $(2.65) $(4.91) $(7.18) Shares used in calculating historical net loss per share, basic and diluted 15,706,593 1,030,125 6,069,278 1,011,125 Pro forma net loss per share $(0.07) $(0.34) $(1.89) $(0.98) Shares used in calculating pro forma net loss per share 19,571,378 7,938,718 15,801,764 7,404,168
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 basis.
Condensed Consolidated Balance Sheet Data: September 30, December 31, 2000 1999 (Unaudited) Assets Cash and cash equivalents $144,648,198 $5,401,508 Other current assets 1,535,037 172,052 Property and equipment, net 3,726,679 2,773,382 Other assets 1,054,969 178,898 Total assets $150,964,883 $8,525,840 Liabilities and Stockholders' Equity (Deficit) Liabilities 4,607,526 4,173,440 Redeemable convertible preferred stock -- 18,251,949 Stockholders' equity (deficit) 146,357,357 (13,899,549) Total liabilities and stockholders' equity (deficit) $150,964,883 $8,525,840
"Arena Pharmaceuticals" and the Company logo are registered U.S. trademarks 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 Relations Center at Arena's website: http://www.arenapharm.com for further information.