Arena Reports Third Quarter Financial Results with Strong Cash Position, Advancing Etrasimod Into a Phase 3 Registrational Program in Atopic Dermatitis

Press Release

Arena Reports Third Quarter Financial Results with Strong Cash Position, Advancing Etrasimod Into a Phase 3 Registrational Program in Atopic Dermatitis

- Delivered compelling topline results from ADVISE Ph 2b trial evaluating etrasimod in atopic dermatitis; advancing into a Ph 3 registrational program
 
- Initiated etrasimod trials: ELEVATE UC 12 Ph 3, GLADIATOR UC and alopecia areata Ph 2
 
- Completed enrollment of CAPTIVATE Ph 2b trial evaluating olorinab in irritable bowel syndrome (IBS) pain, topline data expected Q1 2021
 
- Completed first-in-human Ph 1 trial for APD418
 
- Completed launch of Longboard Pharmaceuticals (formerly Arena Neuroscience)
 
- Cash, cash equivalents and marketable securities of ~$1.2bn as of September 30, 2020
 
- Arena to host conference call and webcast today at 4:30 PM ET to discuss ADVISE results and corporate updates

SAN DIEGO, Calif., Nov. 9, 2020 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today provided a corporate update and reported financial results for the third quarter ended September 30, 2020.

"Over the quarter we made significant progress across our pipeline – most importantly with the results from the ADVISE trial giving us confidence to move expeditiously into a registrational program. Additionally, we initiated the ELEVATE UC 12, GLADIATOR UC and alopecia areata trials. We completed enrollment of the CAPTIVATE Phase 2b trial for olorinab, keeping us on track for expected topline data in Q1. In addition, we have completed the Phase 1 trial of APD418 and have plans to initiate our Phase 2 program in 2021. We also successfully spun-off our neurology franchise with the inception of Longboard Pharmaceuticals, to help unlock the value of those assets," said Amit D. Munshi, President and CEO of Arena. "We are optimistic about the next 12-18 months as we continue our efforts to build long-term value for all of our stakeholders and execute on key catalysts."

Program Updates

  • Etrasimod atopic dermatitis (AD) ADVISE Phase 2b trial delivered topline results; moving forward into a Phase 3 registrational program
  • Etrasimod ELEVATE UC 52 Phase 3 trial in ulcerative colitis (UC) ongoing and on track to complete enrollment by year-end 2020, with the 52-week treatment period ending by year-end 2021 and data expected shortly thereafter; ELEVATE UC 12 Phase 3 trial was initiated, continues to make strong progress with data expected in the same timeframe as UC 52; we continue to monitor the impact of the COVID-19 resurgence on study enrollment for both UC 52 and UC 12
  • Etrasimod GLADIATOR UC Phase 2 planning; initiation expected in Q1 2021 dependent on COVID-19 impact
  • Etrasimod CULTIVATE Phase 2/3 trial in Crohn's disease (CD) ongoing; confirming topline dose-ranging data in 2021; continue to suspend overall program guidance based on COVID-19 impact
  • Etrasimod eosinophilic esophagitis (EoE) Phase 2b VOYAGE trial with initiation expected in 2020 but dependent on COVID-19 impact
  • Etrasimod alopecia areata (AA) Phase 2 initiated; topline data expected H2 2021
  • Olorinab CAPTIVATE Phase 2b trial in abdominal pain associated with irritable bowel syndrome (IBS-C, IBS-D) enrollment completed; topline data expected Q1 2021
  • APD418 in acute heart failure (AHF) with Fast Track designation; completed the first-in-human Phase 1 trial; APD418 was generally well tolerated; Phase 2 planning ongoing

Business Update

  • In October 2020, Arena announced the launch and the completion of a $56 million financing of Longboard (formerly Arena Neuroscience), an independent company focused on advancing investigational therapies for rare neurological diseases. Arena shareholders will continue to participate in the value of these assets via Arena's equity position in the new company and potential future royalty streams.

Financial Update
Third Quarter 2020 Financial Results

  • Revenues for the third quarter were $20,000 compared to $1.4 million in the third quarter of 2019
  • Research and development (R&D) expenses for the third quarter totaled $79.8 million compared to $60.3 million in the same period 2019. This increase was primarily driven by our advancing clinical studies, including the etrasimod Phase 3 program, as well as an increase in personnel expenses as we staff to support our clinical programs. The R&D non-cash, share-based compensation was $6.6 million in the third quarter as compared to $6.7 million in the same period 2019
  • Selling, general and administrative (SG&A) expenses for the third quarter totaled $19.0 million, compared to $20.4 million in the third quarter of 2019. This decrease was primarily driven by a decrease in legal, accounting and other professional fees partially offset by an increase in personnel expenses. The SG&A non-cash, share-based compensation was $5.8 million in the third quarter as compared to $6.6 million in the same period 2019
  • Net loss for the third quarter was $97.4 million compared to net loss of $72.9 million for the same period in 2019
  • Basic and diluted net loss per share for the third quarter was $1.69 compared to basic and diluted net loss per share of $1.46 for the same period in 2019
  • Cash, cash equivalents and marketable securities were $1.2 billion at September 30, 2020, as compared to $1.3 billion at June 30, 2020

Financial Outlook for 2020
Arena's 2020 financial guidance range:

  • Cash used in operating activities for the full-year 2020 is expected to be $345 to $355 million, down compared to our previous guidance of $400 to $430 million. Arena continues to achieve key milestones while 2020 full-year operating expenses decrease due to clinical trial efficiency and continued focus on optimizing spend

Conference Call & Webcast Information
Arena will host a conference call and live webcast the investment community today, Monday, November 9, 2020, at 4:30 PM ET, to discuss the financial results and corporate update.

When: Monday, November 9, 2020, at 4:30 PM ET
Dial-in: (877) 643-7155 (United States) or (914) 495-8552 (International)
Conference ID: 6166976

Please join the conference call at least 20 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 event will be archived under the investor relations section of Arena's website for 30 days shortly after the call.

About Arena Pharmaceuticals
ARENA Pharmaceuticals is a team with a singular purpose – deliver our important medicines to patients.

In a rapidly changing global market, we work with a sense of urgency every day to understand the needs of all our stakeholders, identify bold, sometimes disruptive, ideas to get our medicines to patients, and relentlessly execute until it's done.

ARENA - Care More. Act Differently.

Etrasimod, olorinab and APD418 are investigational compounds that are not approved for any use in any country.

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 may be identified by words such as "expected," "will," "long-term," "outlook," and "guidance" and include, without limitation, statements about the following: Arena's clinical programs, including plans to advance etrasimod into a registrational program in atopic dermatitis, expectations regarding enrollment of study participants and the timing of data readouts for ongoing and anticipated trials, and expectations for the commencement of additional trials; the statements under "Program Updates" above; and Arena's financial outlook and guidance, including expectations regarding cash to be used in operating activities and the rate of change thereof. 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: topline data may not accurately reflect the complete results of a particular study or trial; 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; the timing and outcome of research, development and regulatory review is uncertain, and Arena's drug candidates may not advance in development or be approved for marketing; enrolling patients in Arena's ongoing and intended clinical trials is competitive and challenging; the duration and severity of the coronavirus disease (COVID-19) pandemic, including but not limited to the impact on Arena's clinical operations, the operations of Arena's suppliers, partners, collaborators, licensees, and capital markets, which in each case remains uncertain; risks related to developing and commercializing drugs; Arena will need additional funds to advance all of its programs; the impact of competition; risks related to unexpected or unfavorable new data; the risk that 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; satisfactory resolution of litigation or other disagreements with others; and risks related to the enforcement of Arena's and third parties' intellectual property rights. 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 (SEC), including but not limited to Arena's Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on February 27, 2020, and Arena's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, which was filed with the SEC on August 5, 2020. 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.

Corporate Contacts:
Patrick Malloy
Arena Pharmaceuticals, Inc.
Vice President, Investor Relations & Corporate Communications
pmalloy@arenapharm.com
847.987.4878

Megan E. Knight
Arena Pharmaceuticals, Inc.
Director, Investor Relations 
mknight@arenapharm.com
858.210.3635

 

(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,

 
   

2020

   

2019

   

2020

   

2019

 
   

(unaudited)

   

(unaudited)

 

Revenues

                               

United Therapeutics revenue

 

$

   

$

   

$

   

$

800,000

 

Royalty revenue

   

     

811

     

262

     

2,725

 

Collaboration and other revenue

   

20

     

539

     

20

     

704

 

Total revenues

   

20

     

1,350

     

282

     

803,429

 
                                 

Operating Costs & Expenses

                               

Research & development

   

79,820

     

60,257

     

223,299

     

156,864

 

Selling, general & administrative

   

19,002

     

20,428

     

68,321

     

55,373

 

Transaction costs

   

     

     

     

14,573

 

Total operating costs & expenses

   

98,822

     

80,685

     

291,620

     

226,810

 

Income (loss) from operations

   

(98,802)

     

(79,335)

     

(291,338)

     

576,619

 
                                 

Total interest & other income (expense), net

   

1,364

     

6,470

     

8,765

     

19,580

 

Income (loss) before income taxes

   

(97,438)

     

(72,865)

     

(282,573)

     

596,199

 

Income tax provision

   

     

     

     

(110,333)

 

Net income (loss)

 

$

(97,438)

   

$

(72,865)

   

$

(282,573)

   

$

485,866

 
                                 

Net income (loss) per share, basic:

 

$

(1.69)

   

$

(1.46)

   

$

(5.27)

   

$

9.78

 

Net income (loss) per share, diluted:

 

$

(1.69)

   

$

(1.46)

   

$

(5.27)

   

$

9.39

 
                                 

Shares used in calculating net income (loss) per share, basic:

   

57,779

     

49,864

     

53.608

     

49,667

 

Shares used in calculating net income (loss) per share, diluted:

   

57,779

     

49,864

     

53,608

     

51,763

 

 

 

Arena Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheet Data

(In thousands)

(Unaudited)

 
   

September 30, 2020

   

December 31, 2019

 
             

1

 

Assets

               

Cash & cash equivalents

 

$

460,145

   

$

243,274

 

Prepaid expenses & other current assets

   

34,383

     

20,369

 

Total available-for-sale investments

   

741,005

     

867,229

 

Land, property & equipment, net

   

22,913

     

25,128

 

Other non-current assets

   

17,097

     

18,123

 

Total assets

 

$

1,275,543

   

$

1,174,123

 
                 

Liabilities & Stockholders' Equity

               

Accounts payable & accrued liabilities

 

$

47,647

   

$

41,153

 

Total lease financing obligations & other long-term liabilities

   

57,969

     

61,505

 

Total stockholders' equity

   

1,169,927

     

1,071,465

 

Total liabilities & stockholders' equity

 

$

1,275,543

   

$

1,174,123

 
 

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.