Aradigm Announces First Quarter 2018 Financial Results

Published: May 15, 2018

HAYWARD, Calif.--(BUSINESS WIRE)-- Aradigm Corporation (NASDAQ: ARDM) (the “Company”) today announced financial results for the first quarter and three months ended March 31, 2018.

First Quarter 2018 Financial Results

The Company recorded $1.5 million in revenue in the first quarter of 2018 compared with $1.7 million in revenue in the first quarter of 2017. The Company recognized $1.3 million in contract revenue – related party, $29,000 in government contract revenue and $129,000 in government grant revenue for the first quarter of 2018, as compared to $1.6 million in contract revenue – related party, $39,000 in government contract revenue and $31,000 in government grant revenue for the first quarter of 2017.

Total operating expenses for the first quarter of 2018 were $5.3 million, compared with total operating expenses of $4.5 million for the first quarter of 2017. The increase in expenses was related to the FDA Advisory Committee Meeting. General and administrative costs were unchanged. Research and development expenses increased $800,000. In the first quarter of 2018, our research and development expenses were higher due to higher consulting costs related to the FDA meeting and the submission fees for our MAA application as well as severance expenses. This increase in expenses was offset by lower costs for clinical expense and lower employee related expenses due to a reduction in headcount. The receipt of a tax incentive in Australia offset a portion of the research and development expenses in the first quarter of 2017.

Net loss for the first quarter of 2018 was $4.8 million or $0.32 per share, compared with a net loss of $3.7 million or $0.25 per share in the first quarter of 2017. The increase in net loss resulted primarily from an increase in operating expenses of $800,000 related to the FDA meeting in January and the submission of the MAA to EMA in March for approval of Linhaliq. A decrease in revenue of $200,000 and an increase in interest expense of $100,000 related to the convertible notes was recorded.

Liquidity and Capital Resources and Related Matters

As of March 31, 2018, the Company’s cash and cash equivalents totaled $1.4 million.

In January, Aradigm received a Complete Response Letter (CRL) from the FDA regarding the New Drug Application (NDA) for Linhaliq as a treatment for non-cystic fibrosis bronchiectasis (NCFBE) patients with chronic lung infections with Pseudomonas aeruginosa (P. aeruginosa).

The CRL states that the FDA has determined that it cannot approve the NDA in its present form and provides specific reasons for this action along with recommendations needed for resubmission; the areas of concern include clinical data, human factor validation study and product quality.

The Aradigm Board of Directors approved temporary measures on February 9, 2018 intended to preserve the Company’s cash resources.

In April Aradigm raised $2.0 million through the issuance of bridge notes and obtained commitments for additional monthly funding through September of 2018 totaling $5 million. This $7.0 million along with the cash balance of $1.4 million will be sufficient to fund operations through the third quarter of 2018.

Aradigm is pursuing potential alternatives to resolve our cash position in the short term as well as developing strategic options that would provide for our long term viability. We feel it is very important to bring Linhaliq to commercialization in as many geographies as possible to allow patients suffering from non-cystic fibrosis bronchiectasis (NCFBE) to receive the benefits of Linhaliq. Patients, patient advocacy groups and key opinion leaders have expressed support as we work towards this goal. The MAA was filed in early March and validated for review in late March and that is the first step in achieving regulatory approval in Europe.

About Non-Cystic Fibrosis Bronchiectasis

NCFBE is a severe, chronic and rare disease characterized by abnormal dilatation of the bronchi and bronchioles, frequently associated with chronic lung infections. It is often a consequence of a vicious cycle of inflammation, recurrent lung infections, and bronchial wall damage. NCFBE represents an unmet medical need with high morbidity and mortality that affects more than 150,000 people in the U.S. and over 200,000 people in Europe. There is currently no drug approved for the treatment of this condition.

About Aradigm

Aradigm is an emerging specialty pharmaceutical company focused on the development and commercialization of drugs for the prevention and treatment of severe respiratory diseases. Aradigm has completed two Phase 3 trials with Linhaliq, an investigational proprietary formulation of ciprofloxacin for inhalation for the treatment of non-cystic fibrosis BE and submitted an NDA to the FDA for this indication. Aradigm’s inhaled ciprofloxacin formulations include Linhaliq and Lipoquin which are also product candidates for treatment of patients with cystic fibrosis and non-tuberculous mycobacteria, and for the prevention and treatment of high threat and bioterrorism infections, such as inhaled tularemia, pneumonic plague, melioidosis, Q fever and inhaled anthrax.

More information about Aradigm can be found at www.aradigm.com.

Forward-Looking Statements

Except for the historical information contained herein, this news release contains forward-looking statements that involve risk and uncertainties, including the risk that Linhaliq may not receive regulatory approval or be successfully commercialized, as well as the other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 23, 2018, and the Company’s Quarterly Reports on Form 10-Q.

Aradigm and the Aradigm Logo are registered trademarks of Aradigm Corporation. Linhaliq is a registered trademark of Grifols, S.A.

 
ARADIGM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
(Unaudited)
 
    Three months ended
    March 31,
    2018   2017
         
Revenues   $ 1,473     $ 1,693  
Operating expenses:        
Research and development     3,568       2,774  
General and administrative     1,714       1,678  
         
Total operating expenses     5,282       4,452  
         
Loss from operations     (3,809 )     (2,759 )
         
Interest income     15       28  
Interest expense     (1,004 )     (953 )
Other income (expense), net     (4 )     6  
         
Net loss and comprehensive loss   $ (4,802 )   $ (3,678 )
Basic and diluted net loss per common share   $ (0.32 )   $ (0.25 )
Shares used in computing basic and diluted net loss per common share     15,049       14,800  
 
 
ARADIGM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
    March 31,   December 31,
    2018   2017
    (Unaudited)   *
ASSETS        
Current assets:        
Cash and cash equivalents   $ 1,395     $ 7,095  
Restricted cash     -       -  
Receivables     183       200  
Prepaid and other current assets     709       389  
         
Total current assets     2,287       7,684  
Property and equipment, net     256       289  
Other assets     92       92  
         
Total assets   $ 2,635     $ 8,065  
LIABILITIES AND SHAREHOLDERS' DEFICIT    
Current liabilities:        
Accounts payable     834       903  
Accrued clinical and cost of other studies     523       274  
Accrued compensation     613       1,643  
Deferred revenue – related party, current     633       1,900  
Deferred revenue - other     154       183  
Other accrued liabilities     1,015       563  
         
Total current liabilities     3,772       5,466  
Deferred rent     43       32  
Deferred revenue – related party, non-current     42       90  
Convertible debt, net of discount     2,427       2,382  
Convertible debt – related party, net of discount     13,064       12,626  
Shareholders' deficit     (16,713 )     (12,531 )
         
Total liabilities and shareholders' deficit   $ 2,635     $ 8,065  
         

* The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date.

 

Contacts

Aradigm Corporation
John Siebert, PhD, 510-265-8800
Executive Chairman, Interim Principal Executive Officer and Acting Principal Financial Officer

 
 

Source: Aradigm Corporation

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