Aradigm Announces Fourth Quarter 2012 and Full Year Financial Results

  Aradigm Announces Fourth Quarter 2012 and Full Year Financial Results  Business Wire  HAYWARD, Calif. -- March 26, 2013  Aradigm Corporation (OTC BB: ARDM.OB) (the “Company”)  today announced financial results for the fourth quarter and full year ended December 31, 2012.  Fourth Quarter 2012 Results  The Company recorded $223,000 in revenue in the fourth quarter of 2012 compared with $183,000 in revenue in the fourth quarter of 2011. Total operating expenses for the fourth quarter of 2012 were $2.4 million, compared with total operating expenses of $1.3 million for the fourth quarter of 2011. The increase in operating expenses was primarily due to higher research and development expenses related to the inhaled ciprofloxacin program. The Company’s net loss for the fourth quarter of 2012 was $2.5 million, or $0.01 per share, compared with a net loss of $1.5 million, or $0.01 per share, for the same period in 2011.  Full Year Results  Revenues for the year ended December 31, 2012 were $1.0 million, compared with revenues of $0.8 million in 2011. The increase in revenue was due to higher royalty payments from Zogenix, Inc. for the SUMAVEL® DosePro™ (sumatriptan injection) needle-free delivery system.  Total operating expenses for 2012 were $7.7 million, compared with total operating expenses of $9.3 million in 2011. Research and development expenses decreased by $1.2 million and general and administrative expenses decreased by $0.4 million. The decrease in research and development expenses reflects the completion of the ORBIT-1 bronchiectasis clinical trial of the Company’s inhaled ciprofloxacin product candidate. The decrease in general and administrative expenses was primarily due to lower executive bonus expense.  The net loss for the year ended December 31, 2012 was $8.2 million, or $0.04 per share, compared with a net loss of $9.3 million, or $0.05 per share, in 2011. The net loss reduction was primarily due to the increase in royalty revenue and the reduction in operating expenses, partially offset by higher interest expense from the royalty financing transaction.  As of December 31, 2012, cash, cash equivalents and short-term investments totaled $7.6 million.  2012 Highlights    *December 2012: closed the private placement raising $6 million in     aggregate proceeds. On December 12, 2012, the Company announced that it     entered into a definitive agreement for the sale of common stock to two     existing shareholders, including accounts managed by First Eagle     Investment Management LLC, in a private placement for aggregate gross     proceeds of $6 million. Under the terms of the agreement, the Company     agreed to sell an aggregate of 50,000,000 shares of common stock at a     price of $0.12 per share. After deducting for fees and expenses, the net     proceeds from the sale of the shares of common stock were approximately     $5.5 million.   *November 2012: UK scientists report on the efficacy of Lipoquin against     pneumonic plague. On November 19, 2012, the Company announced that     scientists from the UK Defence Science and Technology Laboratory reported     in a preliminary study that they have demonstrated that a single dose of     the liposomal ciprofloxacin formulation Lipoquin administered 24 hours     after exposure to a lethal dose of the bacterium Yersinia pestis provided     full protection in a murine model of pneumonic plague. In comparison, a     single dose of oral ciprofloxacin administered 24 hours post-exposure     provided no protection.   *October 2012: Virginia Commonwealth University scientists report on the     anti-inflammatory effects of Aradigm’s inhaled liposomal ciprofloxacin. On     October 16, 2012, scientists from the Virginia Commonwealth University     School of Pharmacy reported findings about the anti-inflammatory effects     of inhaled liposomal ciprofloxacin in human bronchial lung cells     stimulated by the lipopolysaccharide produced by Pseudomonas aeruginosa –     one of the most significant bacterial pathogens in patients with cystic     fibrosis, bronchiectasis and severe COPD.   *September 2012: UK scientists report the successful testing of Aradigm’s     inhaled liposomal ciprofloxacin against Q Fever. On September 20, 2012,     the Company announced that scientists from the UK Defence Science and     Technology Laboratory (Dstl) and the Health Protection Agency (HPA)     reported the successful testing of inhaled liposomal ciprofloxacin in a     mouse model of this virulent infection. This work was conducted as part of     the collaborative consortium that Aradigm formed with HPA and Dstl to     evaluate the efficacy of Aradigm’s inhaled liposomal ciprofloxacin against     high threat microbial agents.   *September 2012: third patent issued for Pulmaquin. On September 18, 2012,     the Company announced that the United States Patent and Trademark Office     (USPTO) issued an important new composition of matter patent covering     formulations of liposomal and free ciprofloxacin, including its lead     product candidate, Pulmaquin. The Company expects that the patent will     provide new coverage for Lipoquin and extends protection for Pulmaquin     until February 11, 2031.   *September 2012: additional patent issued for smoking cessation. On     September 5, 2012, the Company announced that the United States Patent and     Trademark Office (USPTO) issued an important method of treatment patent     covering Systems and Methods for Effecting Cessation of Tobacco Use. The     Company expects that the patent will provide exclusivity for specific     systems utilizing inhaled nicotine formulations until January 7, 2024.   *March 2012: received clearance from the FDA for BE IND. On March 12, 2012,     the Company announced that  its Investigational New Drug Application (IND)     to conduct a pivotal Phase 3 clinical trial of Pulmaquin (dual release     ciprofloxacin for inhalation) in non-cystic fibrosis bronchiectasis (BE)     was cleared by the U.S. Food and Drug Administration (FDA).   *February 2012: second patent issued for Pulmaquin. On February 21, 2012,     the Company announced that the United States Patent and Trademark Office     (USPTO) issued an important composition of matter patent covering     formulations of liposomal and free ciprofloxacin, including its lead     product candidate, Pulmaquin. The Company expects that the patent will     provide exclusivity for Pulmaquin until October 22, 2028.  “In the last year, we were issued several important patents that strengthened our intellectual property portfolio and will allow us to extend exclusivity around our lead product candidate, Pulmaquin, and our inhaled nicotine program,” said Igor Gonda, the Company’s president and chief executive officer. “We have also leveraged our collaborations with university and government scientists to report exciting research findings using our product candidates against significant bacterial pathogens and high threat microbial agents.”  About inhaled ciprofloxacin (Pulmaquin™ and Lipoquin™)  Ciprofloxacin is a widely prescribed antibiotic to treat infections of the lung frequently experienced by cystic fibrosis (CF) and non-cystic fibrosis bronchiectasis (BE) patients. It is often preferred because of its broad-spectrum anti-bacterial action. The available oral and intravenous formulations of the drug are used to treat episodes of acute exacerbations of lung infections in CF patients. The Company’s once-a-day novel inhaled formulations of ciprofloxacin are encapsulated in liposomes, allowing for a sustained release of the drug within the lung and improving airway tolerability. The formulations are to be used for chronic maintenance therapy as they are expected to achieve higher antibiotic concentration at the site of infection and relatively low systemic antibiotic concentrations to minimize side-effects. Lipoquin is a liposomal formulation of ciprofloxacin. Pulmaquin is a dual release formulation that is a mixture of Lipoquin with unencapsulated ciprofloxacin. Pulmaquin has been tested extensively in preclinical tests, as well as in the ORBIT-2 Phase 2b bronchiectasis study in which outstanding antimicrobial activity coupled with good safety and tolerability was found, and, most importantly, the positive impact on prevention of exacerbations compared to placebo was also observed. The Company previously reported positive results in Phase 2a studies of 22 CF patients and 36 BE patients who received Lipoquin once-a-day for 2 (CF) or 4 (BE) weeks, respectively. Additionally, Aradigm is developing these formulations as a potential medication for the prevention and treatment of high threat and bioterrorism infections, such as inhaled anthrax, tularemia and Q fever. Aradigm has been granted orphan drug designation for liposomal ciprofloxacin for cystic fibrosis in the U.S. and the E.U., and for inhaled ciprofloxacin and for liposomal ciprofloxacin for BE in the U.S.  About Aradigm  Aradigm is an emerging specialty pharmaceutical company focused on the development and commercialization of a portfolio of drugs delivered by inhalation for the treatment and prevention of severe respiratory diseases. The Company has product candidates addressing the treatment of bronchiectasis, cystic fibrosis, inhalation tularemia and anthrax infections, and smoking cessation.  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 statements regarding extending patent exclusivity, 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, 2011 filed with the SEC on March 28, 2012, and the Company’s Quarterly Reports on Form 10-Q.  Aradigm, Pulmaquin, Lipoquin and the Aradigm Logo are registered trademarks of Aradigm Corporation.  ARADIGM CORPORATION  CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands, except per share data)                                                                             Three months ended          Year ended                           December 31,                December 31,                            2012         2011          2012         2011                                                                     Revenue                  $ 223       $ 183        $ 1,007     $ 791      Operating expenses: Research and               1,477         651           3,781         5,007 development General and                887           679           3,896         4,274 administrative Restructuring and          8             9             34            39 asset impairment                                                                Total operating           2,372      1,339       7,711      9,320    expenses                                                                     Loss from operations       (2,149  )     (1,156  )     (6,704  )     (8,529  )                                                                     Interest income            1             5             10            14 Interest expense           (395    )     (370    )     (1,530  )     (798    ) Other income              -          2           (2      )   4        (expense), net Net loss                 $ (2,543  )  $ (1,519  )   $ (8,226  )  $ (9,309  ) Change in unrealized gains (losses) on          -             -             (1      )     - available-for-sale securities Comprehensive loss       $ (2,543  )  $ (1,519  )   $ (8,227  )  $ (9,309  ) Basic and diluted net    $ (0.01   )  $ (0.01   )   $ (0.04   )  $ (0.05   ) loss per common share                                                                     Shares used in computing basic and       210,137    197,833     201,310    183,419  diluted net loss per common share                                                                                ARADIGM CORPORATION  CONSOLIDATED BALANCE SHEETS  (In thousands)                                                                                                                    December 31,   December 31,                                                     2012           2011                                                                  ASSETS Current assets: Cash and cash equivalents                          $  7,414       $   2,148 Short-term investments                                203             6,516 Receivables                                           41              36 Prepaid and other current assets                      106             161                                                                  Total current assets                                  7,764           8,861 Property and equipment, net                           727             1,113 Notes receivable                                      -               29 Other assets                                          475             553                                                                  Total assets                                       $  8,966     $   10,556 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable                                      330             196 Accrued clinical and cost of other studies            500             247 Accrued compensation                                  184             195 Facility lease exit obligation                        144             120 Other accrued liabilities                            127          86                                                                    Total current liabilities                             1,285           844 Deferred rent, non-current                            144             132 Facility lease exit obligation, non-current           465             609 Other non-current liabilities                         -               75 Note payable and accrued interest                     8,513           8,207 Shareholders' equity (deficit)                        (1,441  )       689                                                                  Total liabilities and shareholders' equity         $  8,966     $   10,556 (deficit)  Contact:  Aradigm Corporation Nancy Pecota, Chief Financial Officer, 510-265-8800  
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