Arena Pharmaceuticals Announces Third Quarter 2005 Financial Results
SAN DIEGO, Oct. 17 /PRNewswire-FirstCall/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported financial results for the third quarter and nine months ended September 30, 2005.
Total revenues in the third quarter of 2005 were $7.4 million, compared to $4.4 million in the third quarter of 2004. Total revenues in the nine months ended September 30, 2005, were $17.4 million, compared to $11.6 million in the nine months ended September 30, 2004. Arena reported a net loss allocable to common stockholders in the third quarter and the nine months ended September 30, 2005 of $16.1 million, or $0.46 per share, and $57.5 million, or $1.69 per share, respectively. This compares with a net loss allocable to common stockholders in the third quarter and the nine months ended September 30, 2004 of $13.6 million, or $0.54 per share, and $43.1 million, or $1.70 per share, respectively.
"During the last quarter, Arena continued to demonstrate the strength of its pipeline, which is diverse and not dependent on one program or partner for success," commented Jack Lief, Arena's President and CEO. "As we continue to work diligently to advance all our programs and timelines and build on our successes to date, we are particularly looking forward to obtaining additional APD356 safety and efficacy data from the Phase 2b obesity trial around year-end."
Research and development expenses totaled $20.8 million in the third quarter of 2005, compared to $13.9 million in the third quarter of 2004. Research and development expenses totaled $58.8 million in the nine months ended September 30, 2005, compared to $42.1 million in the nine months ended September 30, 2004. The increase in 2005 research and development expenses as compared to 2004 is primarily attributable to the clinical trials for Arena's most advanced product candidates, APD356 for obesity and APD125 for insomnia, as well as moving its research and preclinical pipeline forward for a number of additional compounds. General and administrative expenses totaled $2.6 million in the third quarter of both 2005 and 2004. General and administrative expenses totaled $8.2 million in the nine months ended September 30, 2005, compared to $7.6 million in the nine months ended September 30, 2004.
Cash, cash equivalents and short-term investments totaled $148.1 million at September 30, 2005.
Arena's Recent Highlights:
- Merck & Co., Inc. initiated a Phase 1 clinical trial of an orally administered drug candidate being developed under a collaboration encompassing 3 GPCRs that may have the potential to regulate plasma lipid profiles, including HDL cholesterol, similar to the therapeutic action of niacin. The initiation of the Phase 1 clinical trial triggered a $2.0 million milestone payment to Arena.
- Obtained a patent from the European Patent Office relating to certain drug screening methods utilizing the 19AJ receptor, an orphan GPCR discovered by Arena and active in regulating blood glucose levels in a glucose-dependent manner. The invention set forth in the patent was utilized to identify the orally bioavailable compounds that Ortho-McNeil, Inc., a Johnson & Johnson company, and Arena are developing to treat diabetes as part of their collaboration.
- An assessment of follow-up echocardiograms taken approximately 90 days after patients received their first doses of APD356 in Arena's Phase 2a obesity clinical trial indicated no apparent drug effect on heart valves or pulmonary artery pressure after four weeks of dosing.
- Obtained a patent from the United States Patent and Trademark office for APD356 and other compounds that modulate the 5-HT2C serotonin receptor, which helps regulate food intake and may also influence metabolic rate. These modulators may be useful in pharmaceutical compositions for the treatment of obesity.
Arena will host both a conference call and webcast to discuss the third quarter 2005 financial results and to provide a corporate update today, Monday, October 17, 2005, at 5:00 p.m. EDT (2:00 p.m. PDT). Jack Lief, President and Chief Executive Officer and Robert Hoffman, Vice President, Finance and Chief Accounting Officer will be present on the conference call and webcast.
The conference call may be accessed by dialing (800) 659-1966 for domestic callers and (617) 614-2711 for international callers. Please specify to the operator that you would like to join the "Arena Third Quarter Earnings Call." The conference call will be webcast live under the investor relations section of Arena's website at http://www.arenapharm.com, and will be archived there for 30 days following the call. Please connect to Arena's website several minutes prior to the start of the conference call to ensure adequate time for any software download that may be necessary.
About Arena Pharmaceuticals
Arena is a clinical-stage biopharmaceutical company focusing on the discovery, development and commercialization of small molecule drugs in four major therapeutic areas: metabolic, cardiovascular, inflammatory and central nervous system diseases. Arena is developing a broad pipeline of compounds that act on an important class of drug targets called G protein-coupled receptors, or GPCRs, using its knowledge of GPCRs and its technologies, including CART (Constitutively Activated Receptor Technology) and Melanophore. Arena has three internally discovered, clinical-stage product candidates. Arena's most advanced clinical compound, APD356, a selective 5-HT2C serotonin receptor agonist for the treatment of obesity, is in Phase 2b. Arena's lead product candidate for the treatment of insomnia, APD125, a compound with a novel mechanism of action (a selective 5-HT2A receptor inverse agonist), is scheduled to begin a Phase 2 clinical trial by the end of 2005. As part of Arena's partnership with Merck & Co., Inc., an Arena product candidate for the treatment of atherosclerosis and related disorders is in a Phase 1 clinical trial. Arena also has an active collaboration with Ortho-McNeil, Inc., a Johnson & Johnson company, for the treatment of type 2 diabetes.
Arena Pharmaceuticals® and Arena® are registered service marks of the company. CART is an unregistered service mark of the company.
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 possible usefulness of 5-HT2C modulators in pharmaceutical compositions for the treatment of obesity, the protection provided by Arena's patents, and the expected timing of Arena's clinical trials and announcement of results and other statements about Arena's strategy, technologies, opportunity for success, efforts in advancing its programs and timelines, preclinical and clinical programs, and ability to develop compounds and commercialize drugs. 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 results of Arena's clinical trials, the results of preclinical studies or clinical trials may not be predictive of future results, Arena's ability to partner APD356, APD125 or other of its compounds or programs, the timing, success and cost of Arena's research, out-licensing endeavors and clinical trials, Arena's ability to obtain additional financing, Arena's ability to obtain and defend its patents, Arena's patent protection, and the timing and receipt of payments and fees, if any, from Arena's collaborators, including Ortho-McNeil and Merck. 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.
Arena Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations Three months ended Nine months ended September 30, September 30, 2005 2004 2005 2004 (unaudited) (unaudited) Revenues Total revenues $7,431,887 $4,383,332 $17,356,879 $11,565,000 Expenses Research and development 20,820,915 13,874,772 58,760,870 42,055,010 General and administrative 2,558,556 2,639,117 8,210,171 7,610,225 Amortization of non-cash deferred compensation 87,515 283,079 350,824 1,167,378 Amortization of acquired technology 384,249 405,305 1,152,747 1,215,915 Total expenses 23,851,235 17,202,273 68,474,612 52,048,528 Interest and other income, net 781,931 19,561 2,287,016 (143,808) Net loss 15,637,417) (12,799,380) (48,830,717) (40,627,336) Dividends on redeemable convertible preferred stock (494,303) (362,104) (1,313,328) (1,071,612) Accretion of discount related to redeemable convertible preferred stock -- (462,970) (7,372,014) (1,388,912) Net loss allocable to common stockholders $(16,131,720) $(13,624,454) $(57,516,059) $(43,087,860) Net loss per share, basic and diluted $(0.46) $(0.54) $(1.69) $(1.70) Shares used in calculating net loss per share, basic and diluted 35,241,050 25,362,644 34,064,695 25,313,716 Condensed Consolidated Balance Sheet Data September 30, December 31, 2005 2004 (unaudited) (Note) Assets Cash, cash equivalents and short-term investments $148,118,473 $113,313,839 Accounts receivable 1,502,192 22,590,323 Other current assets 4,131,974 5,331,799 Land, property and equipment, net 50,457,738 52,994,209 Acquired technology, investments and other assets 14,222,434 12,134,825 Total assets $218,432,811 $206,364,995 Liabilities and Stockholders' Equity Deferred revenues $26,538,810 $30,070,188 Other liabilities 24,113,430 20,479,593 Redeemable convertible preferred stock 49,277,570 29,092,228 Stockholders' equity 118,503,001 126,722,986 Total liabilities and stockholders' equity $218,432,811 $206,364,995 Note: The Condensed Consolidated Balance Sheet Data has been derived from the audited financial statements as of that date.
Contacts: Jack Lief
President and CEO
Director, Corporate Communications
(858) 453-7200, ext. 1682
Web site: http://www.arenapharm.com
Atkins + Associates
Media & Investor Relations
SOURCE Arena Pharmaceuticals, Inc.