SAN DIEGO, Feb. 27 /PRNewswire-FirstCall/ -- Arena Pharmaceuticals, Inc. today reported financial results for the fourth quarter and full year ended December 31, 2007.
Total revenues in the fourth quarter of 2007 were $4.6 million, compared to $4.7 million in the fourth quarter of 2006. Total revenues in the full year ended December 31, 2007 were $19.3 million, compared to $30.6 million in the full year ended December 31, 2006, which included a $5.0 million milestone earned under Arena's collaboration with Ortho-McNeil Pharmaceutical, Inc. and a $4.0 million milestone earned under Arena's collaboration with Merck & Co., Inc. Arena reported a net loss allocable to common stockholders in the fourth quarter of 2007 of $40.9 million, or $0.60 per share, and a net loss allocable to common stockholders in the full year ended December 31, 2007 of $145.3 million, or $2.31 per share. This compares with a net loss allocable to common stockholders in the fourth quarter of 2006 of $36.4 million, or $0.73 per share, and a net loss allocable to common stockholders in the full year ended December 31, 2006 of $88.3 million, or $1.89 per share.
"In 2007 we continued our focus on innovative R&D and achieved several important clinical milestones, including the positive lorcaserin month-six ESMB review, positive APD125 Phase 2a data and positive APD791 Phase 1a data," stated Jack Lief, Arena's President and Chief Executive Officer. "In 2008 we will continue to advance our pipeline and R&D efforts, both independently and with our partners. We look forward to the lorcaserin month-12 ESMB review in March and to achieving other important milestones in the coming months."
Research and development expenses totaled $40.7 million in the fourth quarter of 2007, compared to $38.1 million in the fourth quarter of 2006. Research and development expenses totaled $149.5 million in the full year ended December 31, 2007, compared to $103.4 million in the full year ended December 31, 2006. The increase in research and development expenses in 2007 over 2006 is primarily attributable to clinical development costs for Arena's Phase 3 clinical program for lorcaserin, its drug candidate for the treatment of obesity, and a Phase 2a clinical trial of APD125, its drug candidate for the treatment of insomnia, as well as an increase in the number of its research and development personnel. Research and development expenses in 2007 included $4.2 million in non-cash, share-based compensation expense, compared to $2.9 million in 2006. General and administrative expenses totaled $6.9 million in the fourth quarter of 2007, compared to $5.2 million in the fourth quarter of 2006. General and administrative expenses totaled $26.6 million in the full year ended December 31, 2007, compared to $18.5 million in the full year ended December 31, 2006. The increase in general and administrative expenses in 2007 over 2006 is primarily attributable to an increase in Arena's general and administrative personnel and non-cash, share-based compensation expense, as well as costs related to Arena's growing and maturing patent portfolio. General and administrative expenses in 2007 included $4.6 million in non-cash, share-based compensation expense, compared to $2.1 million in 2006. Total patent costs, including patent costs related to partnered programs, were $6.4 million in the full year ended December 31, 2007, compared to $4.5 million in the full year ended December 31, 2006.
Cash, cash equivalents and short-term investments totaled $398.2 million at December 31, 2007, and included net proceeds of $103.2 million from a public offering completed in November 2007. Approximately 72.3 million shares of Arena's common stock were outstanding at December 31, 2007.
Outlook for 2008
Arena expects to use cash, cash equivalents and short-term investments of approximately $190 to $210 million for its operating activities in 2008 and approximately $38 to $44 million for capital expenditures, which includes the cash payable at closing for the acquisition from Siegfried Ltd of a drug product finishing facility and related assets, which closed in January 2008. This assumes that Arena, and not a partner, continues to advance and fund its planned 2008 clinical trials for lorcaserin, APD125 and APD791. It also assumes continued progress with Arena's earlier stage programs. Arena expects to end 2008 with approximately $160 million in cash, cash equivalents and short-term investments and assumes common stock will be issued in connection with the conversion or redemption of outstanding shares of its series B redeemable convertible preferred stock, including any that may be redeemed on the series B-1's December 2008 mandatory redemption date. If Arena partners any of its later stage programs, it would expect that its year-end cash, cash equivalents and short-term investments would be higher.
Scheduled Earnings Call
Arena will host both a conference call and webcast to discuss the fourth quarter and full year 2007 financial results and to provide 2008 financial guidance and a corporate update today, Wednesday, February 27, 2008, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Jack Lief, President and Chief Executive Officer and Robert E. Hoffman, Vice President, Finance and Chief Financial Officer will host the conference call.
The conference call may be accessed by dialing 866.356.4281 for domestic callers and 617.597.5395 for international callers. Please specify to the operator that you would like to join the "Arena Fourth Quarter 2007 and Full Year Earnings Call." The participant code for the call is 19957700. 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 broadcast to ensure adequate time for any software download that may be necessary.
Upcoming Corporate Presentations
Arena is currently scheduled to present at the following investment and industry conferences through May 2008:
About Arena Pharmaceuticals
Arena is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. Arena's most advanced drug candidate, lorcaserin, is being investigated in a Phase 3 clinical trial program for the treatment of obesity. Arena's broad pipeline of novel compounds targeting G protein-coupled receptors, an important class of validated drug targets, includes compounds being evaluated independently and with its partners, Merck & Co., Inc. and Ortho-McNeil Pharmaceutical, Inc.
Arena Pharmaceuticals(R) and Arena(R) are registered service marks of the company. "APD" is an abbreviation for Arena Pharmaceuticals Development.
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 include statements about the significance of 2007 events and activities; expected 2008 events and activities; upcoming milestones, including the timing of the month-12 ESMB review of lorcaserin, and the importance of such milestones; the protocol, design, scope, enrollment and other aspects of current and planned clinical trials and other studies of Arena's or its collaborators' product candidates and compounds; the tolerability, side effects, efficacy and potential of Arena's or its collaborators' product candidates and compounds; the advancement of Arena's R&D efforts; the advancement and content of Arena's pipeline; Arena's collaborations, including expected activities thereunder; expectations relating to the agreements and Arena's relationship with Siegfried; lorcaserin's development, FDA submission and commercialization; financial guidance and assumptions, including relating to partnering and its series B preferred stock; and other statements about Arena's vision, outlook, strategy, preclinical and internal and partnered 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, planned clinical trials and studies may not proceed at the time or in the manner Arena expects or at all, the results of preclinical studies or clinical trials may not be predictive of future results, Arena's ability to partner lorcaserin, APD125, APD791 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, the timing and receipt of payments and fees, if any, from Arena's collaborators, and Arena's ability to redeem with common stock any outstanding shares of its series B preferred stock. 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.
CONTACT: Jack Lief, President and CEO, or David Walsey, Director,
Corporate Communications, both of Arena Pharmaceuticals, Inc.,
+1-858-453-7200, ext. 1682; or Mary Claire Duch of WeissComm Partners,
Media Relations, +1-212-301-7228, for Arena Pharmaceuticals, Inc.
Web site: http://www.arenapharm.com/
