Arena Pharmaceuticals Announces 2001 Second Quarter and Six Months Results and Reaffirms Financial Guidance for 2001
SAN DIEGO, Jul 23, 2001 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported revenues of $3.3 million for the quarter ended June 30, 2001, a 158% increase over second quarter 2000 revenues, and $8.7 million for the six months ended June 30, 2001, a 576% increase over the six months ended June 30, 2000. Increased revenues in the second quarter and the first half of 2001 were attributable to collaborations, which included research funding, milestone payments and technology access and development fees. The Company reported a net loss for the second quarter and first half of 2001 of $3.1 million, or $.14 per share and $2.1 million, or $.09 per share after non-cash accounting and amortization charges of $1.5 million and $2.9 million, respectively. This compares with prior year losses for the second quarter and first half, before any non-cash preferred stock charges, of $2.9 million, or $.21 per share and $6.0 million, or $.51 per share on a pro forma basis, respectively.
Research and development expenses nearly doubled to $5.2 million in the second quarter of 2001 as compared to $2.7 million in the second quarter of 2000 and for the six months ended June 30, 2001 research and development expenses increased by $4.0 million to $9.1 million from $5.1 million for the six months ended June 30, 2000.
Cash and cash equivalents totaled $222.9 million at June 30, 2001 and reflect the net proceeds from the Company's secondary offering that was completed in June 2001. Cash and cash equivalents at June 30, 2001 do not include the net proceeds of approximately $19.5 million related to the underwriters' exercising their over-allotment option on the Company's secondary offering in late June 2001. The Company received the over-allotment proceeds on July 2, 2001.
"Arena initiated Project Genesis as a defined internal research focus early this year. We believe that we are making significant progress toward our Project Genesis goals of acquisition, mapping, and completion of medicinal discovery at all G-coupled protein receptor targets. We believe that this significant scientific undertaking is important for Arena's long term success and growth," said Jack Lief, President and CEO. "I am very pleased that in a very tough financial market, we were able to complete our secondary offering, and I believe that a significant component of the success of our offering was based upon the positive reception that Project Genesis has received. We expect that the information that we are developing from Project Genesis will significantly help to both enhance the value of our CART Technology deals and to provide us with the ability to select interesting and lucrative targets for our own internal drug development. We believe Arena's performance during the first half of this year is on track to deliver both positive earnings for the entire year as well as the discovery of new and exciting drug leads."
Arena's CART Technology allows for the direct identification of modulators of G protein-coupled receptors in a ligand-independent manner, making the technology particularly useful with respect to orphan GPCRs, which are estimated to comprise approximately 2% 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 initiated "Project Genesis," an internal program aimed at obtaining all of the human GPCRs, identifying the location of these receptors within normal and diseased tissue of the human body for purposes of understanding the function of such receptors, and screening each GPCR to identify receptor modulators that form the basis of drug candidates. Arena's CART Technology, in conjunction with Arena's recent acquisition of the Melanophore Technology, is intended to facilitate completion of Project Genesis within the next three to five years. Arena is using the Melanophore Technology in combination with its CART Technology for internal drug discovery purposes. Through BRL Screening, Inc. (BRL), Arena intends to also license the Melanophore Technology to biotechnology and pharmaceutical organizations.
Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties, and actual events or results may differ materially from Arena and BRL expectations. Important factors that could cause actual results to differ materially from those stated or implied by Arena's and BRL's forward looking statements due to risks and uncertainties associated with Arena's and BRL'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, and receipt of additional milestone payments, if any, from collaborators. Additional risk factors that could cause actual results to differ materially from those in Arena's or BRL's forward looking statements are disclosed in Arena's SEC reports, including, but not limited to, Arena's registration statement filed June 21, 2001 on Form S-1, as amended, its most recent quarterly report on Form 10-Q and its 2000 annual report on Form 10-K. These forward-looking statements represent Arena's judgment as of the date of this release. Arena and BRL each disclaim, 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,
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Total
revenues $3,330,255 $1,289,271 $8,722,590 $1,289,271
Expenses
Research and
development 5,241,523 2,681,630 9,144,864 5,080,987
General and
administrative 1,331,573 495,671 2,357,556 919,500
Amortization
of non-cash
deferred
compensation 1,072,731 1,419,565 2,341,397 1,829,044
Amortization
of acquired
technology
and other
purchased
intangibles 384,249 -- 512,332 --
Total
expenses 8,030,076 4,596,866 14,356,149 7,829,531
Interest
and other
income, net 1,554,141 421,513 3,572,873 531,978
Net loss (3,145,680) (2,886,082) (2,060,686) (6,008,282)
Non-cash
preferred
stock charge -- (8,203,505) -- (22,391,068)
Net loss
applicable
to common
stockholders $(3,145,680) $(11,089,587) $(2,060,686) $(28,399,350)
Net loss per
share, basic
and diluted $(0.14) $(8.47) $(0.09) $(23.70)
Shares used in
calculating
net loss
per share,
basic and
diluted 22,819,360 1,309,968 22,556,573 1,198,238
Pro forma
net loss
per share $(0.81) $(2.43)
Shares used in
calculating
pro forma
net loss
per share 13,761,385 11,695,092
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 June 30, December 31,
Balance Sheet Data: 2001 2000
(unaudited)
Assets
Cash and cash equivalents $222,927,441 $144,413,176
Proceeds due from
over-allotment exercise 19,545,000 --
Other current assets 4,576,238 3,801,268
Property and equipment, net 13,248,698 4,265,260
Acquired technology and
other assets 16,974,319 232,225
Total assets $277,271,696 $152,711,929
Liabilities and Stockholders' Equity
Liabilities 5,089,786 3,927,604
Stockholders' equity 272,181,910 148,784,325
Total liabilities and
stockholders' equity $277,271,696 $152,711,929
"Arena Pharmaceuticals" and the corporate logo are registered U.S. trademarks of
the Company. "Arena," "CART" and "BRL Screening" 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.
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SOURCE Arena Pharmaceuticals, Inc.
CONTACT: Jack Lief, President & CEO, ext. 223, or Joseph Mooney, CFO,
ext. 508, of Arena Pharmaceuticals, Inc., +1-858-453-7200
