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Arena Pharmaceuticals Provides Corporate Update and Reports Third Quarter 2012 Financial Results

Arena Pharmaceuticals Provides Corporate Update and Reports Third Quarter 2012
                              Financial Results

-- Conference Call and Webcast Scheduled for Today at 5:00 p.m. Eastern Time
--

PR Newswire

SAN DIEGO, Nov. 6, 2012

SAN DIEGO, Nov. 6, 2012 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (NASDAQ:
ARNA) today provided a corporate update and reported financial results for the
third quarter ended September 30, 2012.

Arena is preparing for the launch of BELVIQ^® (lorcaserin HCl) in the United
States, pursuing regulatory approval and collaborations for BELVIQ in
additional territories, and selectively advancing its earlier-stage drug
candidates. Arena's expected upcoming milestones include the following:

  oEisai Inc. beginning to market BELVIQ in the United States in early 2013,
    subject to the US Drug Enforcement Administration's final scheduling
    designation;
  oRegulatory authorities for the European Union and Switzerland providing
    their decisions on the Marketing Authorization Applications (MAA) for
    BELVIQ in the first half of 2013; and
  oResults from the Phase 1 multiple-dose clinical trial of APD811, its
    internally discovered oral drug candidate for the treatment of pulmonary
    arterial hypertension (PAH), in the first quarter of 2013.

"We are well positioned to deliver significant value to our stockholders by
executing on the potential of BELVIQ and strategically advancing our pipeline
of internally discovered drug candidates," said Jack Lief, Arena's President
and Chief Executive Officer. "We look forward to providing a novel treatment
option to patients who need help with chronic weight management. As we prepare
for the US launch of BELVIQ, we continue to pursue additional regulatory
approvals and collaborations in strategic markets worldwide."

Recent Developments

  oEstablished a marketing and supply agreement between its wholly owned
    subsidiary, Arena Pharmaceuticals GmbH, and Ildong Pharmaceutical Co.,
    Ltd., for BELVIQ. Under the agreement, Arena granted Ildong exclusive
    rights to market and distribute BELVIQ in South Korea for weight loss or
    weight management in obese and overweight patients, subject to regulatory
    approval of BELVIQ by the Korea Food and Drug Administration.
  oSubmitted its response to the European Medicines Agency's Committee for
    Medicinal Products for Human Use's 120-day assessment report and list of
    questions regarding the MAA for the marketing of BELVIQ in the European
    Union.
  oInitiated dosing in a Phase 1 multiple-dose clinical trial of APD811, a
    novel drug candidate that targets the prostacyclin (IP) receptor for the
    treatment of PAH. This randomized, double-blind and placebo-controlled
    dose titration trial is evaluating the safety, tolerability,
    pharmacokinetics and optimal titration schedule of multiple-ascending
    doses of APD811. Arena previously evaluated single-ascending doses of
    APD811 in the initial Phase 1 clinical trial.

Third Quarter 2012 Financial Results

Arena recorded revenues totaling $1.5 million in the third quarter of 2012,
compared to $3.5million in the third quarter of 2011, and $25.7 million in
the nine months ended September 30, 2012, compared to $10.6 million in the
nine months ended September 30, 2011. The revenue increase in the nine months
ended September 30, 2012, was primarily due to the $20.0 million milestone
payment from Eisai for the inclusion in the FDA-approved prescribing
information for BELVIQ of the efficacy and safety data from the Phase 3
BLOOM-DM (Behavioral modification and Lorcaserin for Overweight and Obesity
Management in Diabetes Mellitus) clinical trial in patients with type 2
diabetes.

Research and development expenses continued to decline in the third quarter of
2012, decreasing to $11.6 million as compared to $15.0 million in the third
quarter of 2011. Research and development expenses in the nine months ended
September 30, 2012, declined to $40.2 million from $45.6 million in the nine
months ended September 30, 2011, primarily due to decreased salary and other
personnel costs. General and administrative expenses, which increased to $7.4
million in the third quarter of 2012 as compared to $6.0million in the third
quarter of 2011, were $19.0 million in each of the nine-month periods ended
September 30, 2012, and 2011.

Total interest and other expense increased to $27.4 million in the nine months
ended September 30, 2012, compared to $21.1 million in the nine months ended
September 30, 2011. This increase was primarily due to recognition of a $13.9
million non-cash loss from revaluation of derivative liabilities in the nine
months ended September 30, 2012, partially offset by a $4.2 million decrease
in the non-cash loss on extinguishment of debt and a $3.8 million decrease in
interest expense related to the lower balance outstanding on the Deerfield
loan prior to its May 2012 payoff. Arena's net loss allocable to common
stockholders in the nine months ended September 30, 2012, was $67.0 million,
or $0.35 per share, compared to $87.8 million, or $0.64 per share, in the nine
months ended September 30, 2011.

At September 30, 2012, cash and cash equivalents totaled $165.8 million and
approximately 217.2million shares of common stock were outstanding.

Scheduled Conference Call and Webcast

Arena will host a conference call and webcast to discuss the corporate update
and third quarter 2012 financial results today at 5:00 p.m. Eastern Time
(2:00p.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' Corporate Update." 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.

Upcoming Corporate Presentations

Arena is planning to present at upcoming investment and industry conferences,
including:

  oLazard Capital Markets 9th Annual Healthcare Conference, November 13-14,
    2012, New York, New York
  oCredit Suisse Healthcare Conference, November 14-16, 2012, Phoenix,
    Arizona
  oPiper Jaffray 24th Annual Healthcare Conference, November 27-28, 2012, New
    York, New York
  oLeerink Swann 6th ^ Annual POLARxPRESS Bus Tour, November 28, 2012, New
    York, New York
  oOppenheimer 23rd Annual Healthcare Conference, December 12-13, 2012, New
    York, New York
  o31st Annual J.P. Morgan Healthcare Conference, January 7-10, 2013, San
    Francisco, California

About BELVIQ^® (lorcaserin HCl)

BELVIQ (pronounced "BEL-VEEK") was approved by the US Food and Drug
Administration for chronic weight management in June 2012, and is currently
under review for regulatory approval in additional territories. BELVIQ ^ is
believed to decrease food consumption and promote satiety by selectively
activating serotonin 2C receptors in the brain. Activation of these receptors
may help a person eat less and feel full after eating smaller amounts of food.

BELVIQ is indicated to be used along with a reduced-calorie diet and increased
physical activity for chronic weight management in adult patients with an
initial BMI of:

  o30 kg/m^2 or greater (obese), or
  o27 kg/m^2 or greater (overweight) in the presence of at least one weight
    related comorbid condition (e.g., hypertension, dyslipidemia, type 2
    diabetes)

Limitations of Use:

  oThe safety and efficacy of coadministration of BELVIQ with other products
    intended for weight loss including prescription drugs (e.g., phentermine),
    over-the-counter drugs, and herbal preparations have not been established
  oThe effect of BELVIQ on cardiovascular morbidity and mortality has not
    been established

In clinical trials, the most common adverse reactions for patients without
diabetes treated with BELVIQ were headache, dizziness, fatigue, nausea, dry
mouth, and constipation. In patients with diabetes, the most common adverse
reactions were hypoglycemia, headache, back pain, cough, and fatigue.

For more information about BELVIQ, click here for the full prescribing
information or go to http://us.eisai.com/package_inserts/BelviqPI.pdf.

Arena has granted exclusive marketing and distribution rights to Eisai Inc.
for most of North and South America and to Ildong Pharmaceutical Co., Ltd.,
for South Korea, and plans to enter into additional collaborations to
commercialize BELVIQ outside of these territories. Arena has composition of
matter patents for BELVIQ issued in major jurisdictions globally that, in most
cases, are capable of continuing into 2023 without taking into account any
patent term extensions.

About Arena Pharmaceuticals

Arena Pharmaceuticals is a biopharmaceutical company focused on discovering,
developing and commercializing novel drugs for weight management,
cardiovascular disease, inflammation and other disorders. BELVIQ^® (lorcaserin
HCl), Arena's internally discovered drug, was approved by the US Food and Drug
Administration in June 2012, and is under review for regulatory approval in
additional territories. Arena's US operations are located in San Diego,
California, and its operations outside of the United States, including its
commercial manufacturing facility, are located in Zofingen, Switzerland. For
more information, visit Arena's website at www.arenapharm.com.

Arena Pharmaceuticals^® and Arena^® are registered service marks of Arena
Pharmaceuticals, Inc. BELVIQ^® is a registered trademark of Arena
Pharmaceuticals GmbH.

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 advancement, therapeutic indication and use,
safety, efficacy, mechanism of action, regulatory review and approval, DEA
scheduling, launch, commercialization and potential of BELVIQ; pursuing and
entering into additional collaborations; rights, obligations, expectations and
future activities related to the marketing and supply agreements with Eisai
and Ildong; decisions of EU and Swiss regulatory authorities on marketing
applications; delivering value to stockholders; executing on the potential of
BELVIQ; providing a novel treatment to patients; advancing APD811 and other
drug candidates; the therapeutic indication and use, safety, efficacy,
tolerability, mechanism of action and potential of APD811, including the
protocol and other aspects of the Phase1 multiple-dose clinical trial;
BELVIQ's patent coverage; and Arena's efforts, focus, goals, strategy,
research and development programs, and ability to discover and 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, the following: risks related to
commercializing drugs, including regulatory, manufacturing and supply issues
and the pace of market acceptance; cash and revenues generated from BELVIQ,
including the impact of competition; the timing and outcome of regulatory
review is uncertain; government and commercial reimbursement and pricing
decisions; risks related to relying on collaborative arrangements; the timing
and receipt of payments and fees, if any, from collaborators; the entry into
or modification or termination of collaborative arrangements; unexpected or
unfavorable new data; nonclinical and clinical data is voluminous and
detailed, and regulatory agencies may interpret or weigh the importance of
data differently and reach different conclusions than Arena or others, request
additional information, have additional recommendations or change their
guidance or requirements before or after approval; data and other information
related to any of Arena's research and development may not meet safety,
efficacy or other regulatory requirements or otherwise be sufficient for
further research and development, regulatory review or approval or continued
marketing; Arena's ability to obtain and defend patents; the timing, success
and cost of Arena's research and development programs; results of clinical
trials and other studies are subject to different interpretations and may not
be predictive of future results; clinical trials and other studies may not
proceed at the time or in the manner expected or at all; having adequate
funds; and satisfactory resolution of litigation or other disagreements with
others. 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.



Arena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)
                           Three months ended               Nine months ended
                           September 30,                    September 30,
                           2012         2011         2012         2011
                           (unaudited)               (unaudited)
Revenues
Manufacturing services     $   603    $ 1,713     $ 2,924     $ 4,390
Collaborative agreements   882          1,746        22,727       6,253
 Total revenues           1,485        3,459        25,651       10,643
Operating Expenses
Cost of manufacturing      1.396        1,557        2,839        6,215
services
Research and development   11,619       14,978       40,165       45,616
General and administrative 7,392        6,029        18,963       18,996
Restructuring charges      0            0            0            3,467
Amortization of acquired
technology & other         168          197          517          819
intangibles
 Total operating expenses 20,575       22,761       62,484       75,113
Interest and Other Income
(Expense)
Interest income            41           20           81           102
Interest expense           (1,804)      (3,211)      (7,324)      (11,087)
Gain (Loss) from valuation 5,259        (233)        (13,886)     387
of derivative liabilities
Loss on extinguishment of  0            0            (6,338)      (10,514)
debt
Other                      73           (10)         103          40
 Total interest and other 3,569        (3,434)      (27,364)     (21,072)
income (expense), net
Net loss                   (15,521)     (22,736)     (64,197)     (85,542)
Deemed dividend related to
beneficial conversion
                           0            0            (2,824)      (2,260)
 feature of convertible
preferred stock
Net loss allocable to      $(15,521)    $(22,736)    $(67,021)    $(87,802)
common stockholders
Net loss per share
allocable to common
stockholders:
Basic                      $  (0.07)  $  (0.16)  $  (0.35)  $  (0.64)
Diluted                    $  (0.07)  $  (0.16)  $  (0.35)  $  (0.64)
Shares used in calculating
net loss per share
allocable

to common stockholders:
Basic                      213,881      145,965      189,545      136,860
Diluted                    213,881      145,965      189,545      136,860

Arena Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet Data
(In thousands)
                                     September 30, 2012      December 31,
                                                             2011
                                     (unaudited)             ^1
Assets
 Cash and cash equivalents          $ 165,774               $ 57,632
 Accounts receivable                672                     607
 Inventory                          2,808                   0
 Prepaid expenses & other current   4,439                   2,021
assets
 Land, property & equipment, net    76,030                  82,066
 Acquired technology & other        14,437                  14,803
non-current assets
 Total assets                  $ 264,160               $ 157,129
Liabilities and Stockholders' Equity
 Accounts payable and accrued       $  9,431               $  9,574
liabilities
 Total deferred revenues            47,050                  44,682
 Total derivative liabilities       15,503                  1,617
 Total note payable to Deerfield    0                       14,698
 Total lease financing obligations  74,910                  75,996
& other long-term liabilities
 Total stockholders' equity         117,266                 10,562
 Total liabilities &           $ 264,160               $ 157,129
stockholders' equity
^1 The Condensed Consolidated Balance Sheet Data has been derived from the
audited financial statements as of that date.



Contact: Arena Pharmaceuticals, Inc.     Media Contact: Russo Partners
Cindy McGee, Vice President  David Schull, President
Investor Relations & Alliance Management david.schull@russopartnersllc.com
cmcgee@arenapharm.com                   858.717.2310
858.453.7200, ext. 1479



SOURCE Arena Pharmaceuticals, Inc.

Website: http://www.arenapharm.com