Arena Pharmaceuticals, Inc. Announces Fourth Quarter and Full Year 2011 Financial Results and Reviews Recent Developments

SAN DIEGO, March 14, 2012 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) today reported financial results for the fourth quarter and full year ended December 31, 2011, and reviewed recent developments.

"Lorcaserin has the potential to be an important option for physicians to address the medical management of obesity, helping patients lose weight and improve their overall cardiometabolic health," said Jack Lief, Arena's President and Chief Executive Officer. "We look forward to the upcoming lorcaserin advisory committee meeting in May, lorcaserin's PDUFA date in June, and reporting on developments relating to lorcaserin's European marketing authorization application throughout the year."

Research and development expenses continued to decline to $13.1 million in the fourth quarter of 2011 from $16.5 million in the fourth quarter of 2010. Research and development expenses in the full year ended December 31, 2011, declined to $58.7 million from $75.5 million in the full year ended December 31, 2010. These decreases are primarily attributable to Arena's first quarter 2011 workforce reduction and ongoing cost-containment efforts, as well as completion of the Phase 3 lorcaserin clinical trials. General and administrative expenses decreased to $5.3 million in the fourth quarter of 2011, compared to $7.3 million in the fourth quarter of 2010, and $24.2 million in the full year ended December 31, 2011, compared to $27.9 million in the full year ended December 31, 2010. These decreases are primarily attributable to lower legal fees, including litigation and patent fees, as well as the 2011 workforce reduction and lower marketing research expenses.

Total interest and other expense in the fourth quarter of 2011 decreased to $5.4 million, compared to $5.8 million in the fourth quarter of 2010. Total interest and other expense in the full year ended December 31, 2011, decreased to $26.4 million, compared to $28.2 million in full year ended December 31, 2010. These decreases are primarily attributable to reductions in interest expense resulting from Arena's principal prepayments on its Deerfield loan of $20.0 million in January 2011 and $17.7 million in March 2011. Arena's net loss allocable to common stockholders in the fourth quarter of 2011 was $23.7 million, or $0.16 per share, compared to $28.2 million, or $0.23 per share, in the fourth quarter of 2010. Including $10.5 million of non-cash debt extinguishment charges and $3.5 million of restructuring charges, Arena's net loss allocable to common stockholders in the full year ended December 31, 2011, was $111.5 million, or $0.80 per share, compared to $124.5 million, or $1.14 per share, in the full year ended December 31, 2010, which included $12.4 million of non-cash debt extinguishment charges.

At December 31, 2011, cash and cash equivalents totaled $57.6 million and approximately 146.1 million shares of common stock were outstanding. In January 2012, Arena received net proceeds of approximately $27.9 million from its equity financing with certain Deerfield entities, after principal prepayment of $5.0 million on its Deerfield loan. In March 2012, Arena received net proceeds of approximately $24.7 million under an equity line of credit with Azimuth Opportunity, L.P. After such financings, on March 14, 2012, approximately 180.4 million shares of common stock were outstanding.

Recent Highlights

• Filed a marketing authorization application, or MAA, for lorcaserin through the centralized procedure with the European Medicines Agency, or EMA. Arena was previously assigned the UK's Medicines and Healthcare products Regulatory Agency, or MHRA, as application Rapporteur, and Sweden's Medical Products Agency, or MPA, as Co-rapporteur. Arena expects the EMA will accept the MAA later this month and confirm the filing is sufficient to permit a substantive review.
• Resubmitted the lorcaserin New Drug Application, or NDA, with the US Food and Drug Administration, or FDA. The FDA has accepted the resubmission for filing and review, assigned a new Prescription Drug User Fee Act, or PDUFA, target date of June 27, 2012, and notified Arena that an Endocrinologic and Metabolic Drugs Advisory Committee meeting to discuss the resubmission is tentatively scheduled on May 10, 2012. The resubmission includes data and analyses that were not incorporated in the original NDA, including the results of the Phase 3 BLOOM-DM (Behavioral modification and Lorcaserin for Overweight and Obesity Management in Diabetes Mellitus) clinical trial, which evaluated lorcaserin for weight loss in patients with type 2 diabetes and was completed after Arena filed the original NDA. The new information also includes data and analyses from activities intended to address tumors observed in a two-year lorcaserin rat carcinogenicity study, as well as cell culture experiments intended to further refine serotonin subtype 2 receptor activity and rat studies designed to further assess abuse potential.

Scheduled Financial Results Call

Arena will host a conference call and webcast to discuss the fourth quarter and full year 2011 financial results and to provide a business and financial update today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).

The conference call may be accessed by dialing 877.643.7155 for domestic callers and 914.495.8552 for international callers. Please specify to the operator that you would like to join the "Arena Pharmaceuticals' Fourth Quarter and Full Year 2011 Financial Results Call." The conference call will be webcast live under the investor relations section of Arena's website at 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 broadcast to ensure adequate time for any software download that may be necessary.

About Lorcaserin

Lorcaserin is a new chemical entity that is believed to act as a selective serotonin 2C receptor agonist. The serotonin 2C receptor is expressed in the brain, including the hypothalamus, an area believed to be involved in the control of appetite and metabolism. Arena has patents that cover lorcaserin in the United States, Europe and other jurisdictions that in most cases are capable of continuing into 2023 without taking into account any patent term extensions or other exclusivity Arena might obtain.

Arena resubmitted to the FDA the lorcaserin NDA in December 2011, and the agency has assigned a new PDUFA target date of June 27, 2012. Eisai Inc. has exclusive rights to market and distribute lorcaserin in the United States subject to FDA approval of the lorcaserin NDA. An MAA for lorcaserin was filed with the EMA in March 2012. Arena currently owns rights to lorcaserin outside of the United States.

About Arena Pharmaceuticals

Arena is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors, an important class of validated drug targets, in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases.

Arena Pharmaceuticals® and Arena® are registered service marks of the company.