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Arena Pharmaceuticals Provides Corporate Update and Reviews Fourth Quarter and Full Year 2012 Financial Results

Arena Pharmaceuticals Provides Corporate Update and Reviews Fourth Quarter and
                       Full Year 2012 Financial Results

-- Conference Call and Webcast Scheduled for Today at 8:30 a.m. Eastern Time
--

PR Newswire

SAN DIEGO, March 4, 2013

SAN DIEGO, March 4, 2013 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (NASDAQ:
ARNA) today provided a corporate update and reviewed financial results for the
fourth quarter and full year ended December 31, 2012.

"2012 was a momentous year for Arena with the FDA approval of our first drug,
BELVIQ," said Jack Lief, Arena's President and Chief Executive Officer. "It is
a time of great pride, with BELVIQ representing the first of what we expect
will be many novel treatments resulting from our validated research and
development approach."

BELVIQ^® (lorcaserin HCl) was approved on June 27, 2012, by the US Food and
Drug Administration as an adjunct to a reduced-calorie diet and increased
physical activity for chronic weight management in adult patients with an
initial body mass index (BMI) of 30 kg/m^2 or greater (obese), or 27 kg/m^2 or
greater (overweight) in the presence of at least one weight-related comorbid
condition (e.g. hypertension, dyslipidemia, type 2 diabetes). Once the US Drug
Enforcement Administration, or DEA, finalizes the scheduling designation,
BELVIQ will be available to eligible patients in the United States by
prescription.

"We look forward to the US launch of BELVIQ, and the opportunity to make this
important treatment option available to physicians and patients in other parts
of the world," said Dominic P. Behan, Ph.D., Arena's Executive Vice President
and Chief Scientific Officer. "We are also focused on advancing our pipeline
of potential new treatments for unmet medical needs."

Recent Developments:

BELVIQ^® (lorcaserin HCl)

  oThe DEA issued a Notice of Proposed Rulemaking proposing BELVIQ be placed
    in Schedule IV of the Controlled Substances Act. Once final, BELVIQ will
    be made available by prescription to eligible patients in the United
    States. BELVIQ will be manufactured by Arena at its Swiss facility, and
    marketed and distributed by Eisai Inc.
  oEntered into a Marketing and Supply Agreement with 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.
  oReceived the Day 180 List of Outstanding Issues from the European
    Medicines Agency and the initial assessment from Swissmedic, both of which
    contained a list of questions with major objections with respect to the
    marketing authorization applications.

APD811

  oReceived preliminary results from a Phase 1 multiple-dose clinical trial
    of APD811, a novel drug candidate that targets the prostacyclin receptor
    and is intended for the treatment of pulmonary arterial hypertension.
    Evidence of intended pharmacology was achieved and the most common adverse
    events were consistent with the expected pharmacology of the drug
    candidate and the previously conducted single-dose trial. Arena plans to
    include an additional cohort in the Phase 1 program to optimize the dosing
    regimen prior to potentially initiating a Phase 2 clinical trial.

Temanogrel

  oEntered into a co-development and license agreement with Ildong for
    temanogrel, Arena's internally discovered inverse agonist of the serotonin
    2A receptor. Ildong is responsible for funding and conducting, under the
    direction of a joint steering committee, the next two planned clinical
    trials in this program: an additional Phase 1 trial in healthy volunteers
    and a Phase 2a proof-of-concept trial in patients. The agreement grants
    Ildong exclusive rights to commercialize temanogrel in South Korea for
    myocardial infarction, acute coronary syndrome, stroke, peripheral artery
    disease, and other cardiovascular diseases, subject to further development
    and regulatory approval of temanogrel.

Fourth Quarter and Full Year 2012 Financial Results

Arena recorded revenues totaling $1.9 million in the fourth quarter of 2012,
compared to $2.1million in the fourth quarter of 2011, and $27.6 million in
the full year ended December 31, 2012, compared to $12.7 million in the full
year ended December 31, 2011. The revenue increase in the full year ended
December 31, 2012, was primarily due to the $20.0 million milestone payment
from Eisai for the inclusion 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 the FDA-approved
prescribing information for BELVIQ.

Research and development expenses increased to $13.9 million in the fourth
quarter of 2012 from $13.1 million in the fourth quarter of 2011. Research and
development expenses in the full year ended December 31, 2012, declined to
$54.1 million from $58.7 million in the full year ended December 31, 2011.
These decreases were primarily attributable to decreases in internal research
and development manufacturing costs related to our Swiss manufacturing
facility and decreased salary and other personnel costs. General and
administrative expenses increased to $7.3 million in the fourth quarter of
2012, compared to $5.3 million in the fourth quarter of 2011, and $26.2
million in the full year ended December 31, 2012, compared to $24.2 million in
the full year ended December 31, 2011. These increases were primarily
attributable to higher share-based compensation and salary and other personnel
costs.

Total interest and other expense in the fourth quarter of 2012 decreased to
$1.0 million, compared to $5.4 million in the fourth quarter of 2011. Total
interest and other expense in the full year ended December 31, 2012, increased
to $28.4 million, compared to $26.4 million in full year ended December 31,
2011. This expense increase in the full year ended December 31, 2012, was
primarily due to recognition of a $13.4 million non-cash loss from revaluation
of derivative liabilities, partially offset by a $5.2 million decrease in
interest expense related to the payoff in May 2012 of Arena's former loan with
Deerfield and a $4.2 million decrease in the non-cash loss on extinguishment
of debt. Arena's net loss allocable to common stockholders in the full year
ended December 31, 2012, was $88.3 million, or $0.45 per share, compared to
$111.5 million, or $0.80 per share, in the full year ended December 31, 2011.

At December 31, 2012, cash and cash equivalents totaled $156.1 million and
approximately 217.5 million shares of common stock were outstanding.

2013 Financial Guidance

In addition to revenue from BELVIQ sales, Arena expects revenues of $65
million in milestone payments from Eisai following the DEA's final scheduling
of BELVIQ, approximately $6 million from amortization of upfront payments from
existing collaborations, approximately $3 million from manufacturing services
from Siegfried, and $1.5 million from additional regulatory milestone payments
from Eisai. Arena expects full year 2013 research and development expenses of
approximately $70 million to $78 million, including non-cash expenses of
approximately $7million, and general and administrative expenses of
approximately $28 million to $34 million, including non-cash expenses of
approximately $6 million.

Scheduled Conference Call and Webcast

Arena will host a conference call and webcast to provide a corporate update
and report fourth quarter and full year 2012 financial results today at 8:30
a.m. Eastern Time (5:30a.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' Fourth Quarter and Full Year 2012 Conference
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 BELVIQ^® (lorcaserin HCl)

BELVIQ (pronounced "BEL-VEEK") 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. The exact mechanism of action is not known.

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. Arena 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, and has filed applications for
patent extension in the United States, which, if granted, will extend the
patent term for BELVIQ into 2026.

About Arena Pharmaceuticals

Arena is a biopharmaceutical company focused on discovering, developing and
commercializing novel drugs that target G protein-coupled receptors, or GPCRs,
to address unmet medical needs. 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, importance, DEA scheduling, launch,
commercialization and potential of BELVIQ; regulatory filings and review and
commercialization of BELVIQ outside of the United States; the significance of
2012 for Arena; the advancement of Arena's pipeline; the potential of
additional new or novel treatments; the advancement, therapeutic indication
and use, safety, efficacy, mechanism of action and potential of temanogrel and
APD811; rights, obligations, expectations and future activities related to the
agreements with Eisai and Ildong; financial guidance; and Arena's focus,
plans, goals, strategy, expectations, 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;
Arena's revenues will be based in part on management's estimates, judgment and
accounting policies, and incorrect estimates or disagreement regarding Arena's
estimates or accounting policies may result in changes to Arena's guidance or
previously reported results; the timing and outcome of regulatory review is
uncertain, and BELVIQ may not be approved for marketing when expected or ever
by any other regulatory agency; 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 amounts)
                                 Three months ended          Year ended
                                 December 31,                December 31,
                                 2012       2011       2012        2011
                                 (unaudited)           (Note)
Revenues
Manufacturing services           $ 893     $ 948     $ 3,817    $ 5,338
Collaborative agreements         1,043      1,128      23,770      7,381
 Total revenues                 1,936      2,076      27,587      12,719
Operating Expenses
Cost of manufacturing services   832        1,885      3,671       8,100
Research & development           13,947     13,090     54,112      58,706
General & administrative         7,263      5,252      26,226      24,248
Restructuring charges            0          0          0           3,467
Amortization of acquired         174        178        691         997
technology & other intangibles
 Total operating expenses       22,216     20,405     84,700      95,518
Interest & Other Income
(Expense)
Interest income                  38         15         119         117
Interest expense                 (1,796)    (3,222)    (9,120)     (14,309)
Gain (Loss) from valuation of    461        (340)      (13,425)    47
derivative liabilities
Loss on extinguishment of debt   0          0          (6,338)     (10,514)
Other                            297        (1,806)    400         (1,766)
 Total interest & other         (1,000)    (5,353)    (28,364)    (26,425)
expense, net
Net loss                         (21,280)   (23,682)   (85,477)    (109,224)
Deemed dividend related to
beneficial conversion feature of 0          0          (2,824)     (2,260)
convertible preferred stock
Net loss allocable to common     $(21,280)  $(23,682)  $(88,301)   $(111,484)
stockholders
Net loss per share allocable to
common stockholders:
Basic                            $(0.10)    $(0.16)    $(0.45)     $(0.80)
Diluted                          $(0.10)    $(0.16)    $(0.45)     $(0.80)
Shares used in calculating net
loss per share allocable to
common stockholders:
Basic                            217,309    146,028    196,524     139,171
Diluted                          217,309    146,028    196,524     139,171

Note: The Condensed Consolidated Statements of Operations has been derived
from the audited financial statements for the year ended December 31, 2011,
and from the unaudited financial statements for the year ended December 31,
2012.

Arena Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet Data
(In thousands)
                                         December 31, 2012  December 31, 2011
                                         *                  *
Assets
 Cash & cash equivalents                $ 156,091          $ 57,632
 Accounts receivable                    5,556              607
 Inventory                              6,058              0
 Prepaid expenses & other current       3,454              2,021
assets
 Land, property & equipment, net        75,417             82,066
 Acquired technology & other            14,630             14,803
non-current assets
 Total assets                      $ 261,206          $ 157,129
Liabilities & Stockholders' Equity
 Accounts payable & accrued liabilities $   10,210       $   9,574
 Total deferred revenues                62,735             44,682
 Total derivative liabilities           15,042             1,617
 Total note payable to Deerfield        0                  14,698
 Total lease financing obligations &    74,580             75,996
other long-term liabilities
 Total stockholders' equity             98,639             10,562
 Total liabilities & stockholders' $ 261,206          $ 157,129
equity

* The Condensed Consolidated Balance Sheet Data has been derived from the
audited financial statements as of December 31, 2011, and from the unaudited
financial statements as of December 31, 2012.

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
 
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