Ardea Biosciences, Inc. Reports Recent Accomplishments and Third Quarter and Year-to-Date 2010 Financial Results

SAN DIEGO, Nov. 9, 2010 /PRNewswire-FirstCall/ -- Ardea Biosciences, Inc. (Nasdaq: RDEA), a biotechnology company focused on the development of small-molecule therapeutics for the treatment of serious diseases, today reported recent accomplishments and financial results for the three and nine months ended September 30, 2010.

"Recent data from two clinical studies demonstrate that the combination of RDEA594 with either of the currently marketed drugs for gout, febuxostat (Uloric®) or allopurinol, results in significantly larger reductions in uric acid levels in gout patients than those achieved by dosing either of these marketed drugs alone," commented Barry D. Quart, PharmD, Ardea's president and chief executive officer. "The magnitude of activity observed with these oral combinations represents an opportunity to bring relief to the millions of gout patients who do not adequately respond to available therapies, including the severe, refractory gout population."

"We also are pleased to announce that we have recently completed enrollment in our large, randomized, Phase 2b study designed to evaluate the benefit of adding RDEA594 to allopurinol in gout patients who do not adequately respond to allopurinol alone," added Dr. Quart. "We expect to complete dosing by year-end and report top-line results in January."

Recent Accomplishments and Important Upcoming Events

• We recently announced results from a clinical study evaluating the use of RDEA594 in combination with febuxostat in gout patients. In this study, 100 percent of patients receiving the combination achieved serum urate ("sUA") levels below the clinically important target level of 6 mg/dL, compared to 67 percent and 56 percent for patients receiving 40 mg and 80 mg, respectively, of febuxostat alone. At the highest combination doses tested (600 mg RDEA594 combined with 80 mg febuxostat), 100 percent of patients reached sUA levels below 4 mg/dL, with 58 percent achieving levels below 3 mg/dL. No patient achieved these reduced sUA levels on either dose of febuxostat alone. The combination of RDEA594 and febuxostat was well tolerated with no serious adverse events or discontinuations due to adverse events.
• We also announced results from a clinical study evaluating the use of RDEA594 in combination with allopurinol in gout patients. In this study, 100 percent of patients at all combination doses evaluated achieved sUA levels below the target of 6 mg/dL, compared to 20 percent of patients on allopurinol alone. Of patients receiving RDEA594 600 mg alone, 67 percent achieved sUA levels below 6 mg/dL, which was significantly higher than the percent reaching target on allopurinol alone (p < 0.05). At the highest combination doses tested, 90 percent of patients reached sUA levels below 5 mg/dL, and 50 percent reached levels below 4 mg/dL. The combination of RDEA594 and allopurinol was well tolerated, with no serious adverse events or discontinuations that were considered possibly related to RDEA594 or the combination.
• Enrollment has been completed in our randomized, placebo-controlled, Phase 2b study evaluating the addition of RDEA594 to allopurinol in more than 200 gout patients not responding adequately to allopurinol alone. We expect to complete dosing in this study by year-end and announce top-line results in January 2011.
• We were awarded a $733,000 grant under the Patient Protection and Affordable Care Act. We expect the grant to be fully funded in the fourth quarter of 2010.
• Results from our single-agent, dose-escalation, Phase 1 study of BAY 86-9766 (formerly known as RDEA119) in advanced cancer patients will be presented by Colin Weekes, MD, PhD, Assistant Professor, Division of Medical Oncology at the University of Colorado School of Medicine, on November 18, 2010 at the 22nd EORTC-NCI-AACR symposium on "Molecular Targets and Cancer Therapeutics." In addition, data from preclinical studies of BAY 86-9766 demonstrating its potential for administration in combination with other anti-cancer agents will be presented during the conference.
• In coordination with Bayer, we intend to continue our ongoing Phase 1/2 study of BAY 86-9766 in combination with sorafenib in advanced cancer patients with different tumor types.

Third Quarter and Year-to-Date 2010 Financial Results

As of September 30, 2010, we had $89.4 million in cash, cash equivalents and short-term investments, and $2.8 million in receivables, compared to $50.9 million in cash, cash equivalents and short-term investments, and $1.4 million in receivables as of December 31, 2009. The net increase in cash, cash equivalents and short-term investments for 2010 was due primarily to our April 2010 public offering of common stock, partially offset by the use of cash to fund our clinical-stage programs, personnel costs and for other general corporate purposes. The increase in receivables for 2010 was due to increased reimbursements of third-party development costs associated with our MEK inhibitor program under our license agreement with Bayer.

Revenues totaled $3.3 million and $10.1 million for the three and nine months ended September 30, 2010, respectively. Revenues totaled $9.2 million and $14.7 million for the three and nine months ended September 30, 2009, respectively. The revenues earned in 2009 and 2010 resulted from the recognition of a portion of the upfront, non-refundable license fee under the Bayer agreement and the related reimbursement by Bayer of third-party development costs. The decrease in revenues for both the three and nine months ended September 30, 2010 was the result of extending the amortization period of the upfront license fee due to an increase in the estimated time period in which we are expected to complete our obligations under the Bayer agreement.

For the three and nine months ended September 30, 2010, total operating expenses increased to $21.4 million and $50.7 million, respectively, from $11.4 million and $38.5 million for the same periods in 2009. Total operating expenses for the three and nine months ended September 30, 2010 included non-cash stock-based compensation charges of $5.5 million and $9.0 million, or $0.24 per share and $0.42 per share, respectively, as compared to charges of $1.3 million and $4.3 million, or $0.07 per share and $0.24 per share, respectively, for the same periods in 2009. These increased charges were in connection with the departure of certain employees during the third quarter of 2010. The increase in total operating expenses between the 2009 and 2010 periods was primarily a result of an increase in research and development expense due mainly to the continued development and progression of our clinical and preclinical programs, as well as the above-described increase in non-cash, stock-based compensation expense.

Net loss for the three and nine months ended September 30, 2010 was $18.2 million and $41.0 million, or $0.79 per share and $1.92 per share, respectively, compared to a net loss for the same periods in 2009 of $2.5 million and $24.5 million, or $0.13 per share and $1.36 per share, respectively. The increase in net loss between these periods was due primarily to the decrease in revenues and increase in operating expenses, described previously. In addition, the increase in net loss per share for the nine months ended September 30, 2010 compared to the same period in 2009 was partially offset by an increase in weighted-average shares outstanding in 2010 as a result of our April 2010 public offering of common stock.