SAN DIEGO, March 12, 2009 /PRNewswire-FirstCall/ -- Arena Pharmaceuticals, Inc. today reported financial results for the fourth quarter and full year ended December 31, 2008.
Arena reported a net loss allocable to common stockholders in the fourth quarter of 2008 of $62.5 million, or $0.84 per share, and a net loss allocable to common stockholders in the full year ended December 31, 2008 of $239.5 million, or $3.24 per share. This compares with 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. The increased net loss in 2008 over 2007 is due primarily to Arena’s Phase 3 clinical trial program of lorcaserin hydrochloride, or lorcaserin, for the treatment of obesity. Total revenues in the fourth quarter of 2008 were $2.7 million, compared to $4.6 million in the fourth quarter of 2007. Total revenues in the full year ended December 31, 2008 were $9.8 million, compared to $19.3 million in the full year ended December 31, 2007. This revenue decrease in 2008 is due primarily to reaching the end of the research funding portion of Arena’s collaborations with Merck & Co., Inc., and Ortho-McNeil-Janssen Pharmaceuticals, Inc., in the fourth quarter of 2007.
“We are excited that in only a few weeks we will be announcing top-line data from the first of two pivotal trials evaluating the safety and efficacy of lorcaserin, which has the potential to be the first in a new class of drugs selectively targeting a well validated weight loss receptor,” stated Jack Lief, Arena’s President and Chief Executive Officer. “Given the challenging economic environment, we will continue to focus our resources on the lorcaserin program. I am optimistic that data from this program, as well as from other programs in our broad pipeline, will continue to generate interest from prospective collaborators and help in our efforts to strengthen our balance sheet.”
Research and development expenses totaled $53.3 million in the fourth quarter of 2008, compared to $40.7 million in the fourth quarter of 2007. Research and development expenses totaled $204.4 million in the full year ended December 31, 2008, compared to $149.5 million in the full year ended December 31, 2007. This increase in research and development expenses in 2008 over 2007 is primarily attributable to the Phase 3 program of lorcaserin. Research and development expenses for all of 2008 included $5.0 million in non-cash, share-based compensation expense, compared to $4.2 million in 2007. General and administrative expenses totaled $8.6 million in the fourth quarter of 2008, compared to $6.9 million in the fourth quarter of 2007. General and administrative expenses totaled $30.5 million in the full year ended December 31, 2008, compared to $26.6 million in the full year ended December 31, 2007. This increase in general and administrative expenses in 2008 over 2007 is primarily attributable to increases in personnel-related expenses, as well as costs related to managing Arena’s growing and maturing patent portfolio. General and administrative expenses in 2008 included $3.5 million in non-cash, share-based compensation expense, compared to $4.6 million in 2007. Total patent costs, including patent costs related to partnered programs, were $7.3 million in the full year ended December 31, 2008, compared to $6.4 million in the full year ended December 31, 2007.
Total interest and other income in 2008 reflected a net expense due to a decrease in interest income, as well as non-cash charges related to a settlement with one of Arena’s two warrant holders from its Series B Convertible Preferred Stock financing and a write-down of an investment in TaiGen Biotechnology Co., Ltd. Arena redeemed all of its outstanding shares of Series B Convertible Preferred Stock in November 2008 for $55.8 million.
Cash, cash equivalents and short-term investments totaled $110.1 million at December 31, 2008. Approximately 74.1 million shares of Arena’s common stock were outstanding at December 31, 2008.
Arena’s Recent and 2008 Developments
Lorcaserin
Other
Scheduled Earnings Call
Arena will host both a conference call and webcast to discuss the fourth quarter and full year 2008 financial results and to provide a corporate update today, Thursday, March 12, 2009, 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 877.741.4240 for domestic callers and 719.325.4753 for international callers. Please specify to the operator that you would like to join the “Arena Pharmaceuticals Fourth Quarter 2008 Earnings 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 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 target G protein-coupled receptors, an important class of validated drug targets, and includes compounds being evaluated independently and with partners, Merck & Co., Inc., and Ortho-McNeil-Janssen Pharmaceuticals, 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 therapeutic indication, tolerability, side effects, efficacy and potential of Arena’s or its collaborators’ product candidates and compounds; the timing and significance of the results for lorcaserin and other programs in Arena’s pipeline, including with respect to potential partnering and Arena’s balance sheet; and other statements about Arena’s focus, strategy, internal and partnered 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, clinical trials and studies may not proceed at the time or in the manner Arena expects or at all, the results of clinical trials or preclinical studies may not be predictive of future results, Arena’s ability to receive regulatory approval for its drug candidates, Arena’s ability to partner lorcaserin 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 and the timing and receipt of payments and fees, if any, from Arena’s collaborators. 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, Senior 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/
