Arena Pharmaceuticals Provides Corporate Update and Reports First Quarter 2013 Financial Results

Arena Pharmaceuticals Provides Corporate Update and Reports First Quarter 2013
                              Financial Results

-- Conference Call and Webcast Scheduled for Today at 5:15 p.m. Eastern Time

PR Newswire

SAN DIEGO, May 2, 2013

SAN DIEGO, May 2, 2013 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (NASDAQ:
ARNA) today provided a corporate update and reported financial results for the
first quarter ended March 31, 2013.

Recent Developments:

BELVIQ^® (lorcaserin HCl)

  oThe American Association of Clinical Endocrinologists (AACE) published its
    Comprehensive Diabetes Management Algorithm. This document provides
    treatment guidelines and specifically addresses the care of patients who
    are overweight or obese. The guidelines call for physicians' use of
    anti-obesity medical therapy, including BELVIQ, along with lifestyle
    modification for patients who have a body mass index (BMI) of 27 kg/m^2 or
    greater along with cardiometabolic or biomedical complications.
  oNotified the European Medicines Agency that the company is withdrawing the
    BELVIQ Marketing Authorization Application (MAA) in the European Union.
    Arena is currently evaluating the best approach for submitting at a later
  oReceived a $500,000 milestone payment from Eisai Inc. in connection with
    Eisai Laboratorios S. de R.L. de C.V.'s submission of the MAA for the
    marketing approval of BELVIQ ^ in Mexico with the Federal Commission for
    the Protection Against Sanitary Risk.
  oResponded to the initial assessment from Swissmedic on the MAA for the
    marketing approval of BELVIQ in Switzerland.

"We are pleased with AACE's recently published treatment guidelines and the
specific reference to BELVIQ, which we believe will increase awareness among
physicians and support the expansion of reimbursement," said Jack Lief,
Arena's President and Chief Executive Officer. "We look forward to the
completion of BELVIQ's scheduling designation in the United States, and we are
focused on making this new treatment option available to patients in
additional parts of the world."


  oInitiated dosing of an additional cohort in a Phase 1 multiple dose
    clinical trial of APD811, an oral drug candidate that targets the
    prostacyclin (IP) receptor for the potential treatment of pulmonary
    arterial hypertension (PAH). This randomized, double-blind and
    placebo-controlled trial is designed to evaluate the safety, tolerability
    and pharmacokinetics of multiple-ascending doses of APD811 and to optimize
    the dosing regimen prior to potentially initiating a Phase 2 clinical


  oInitiated dosing in a Phase 1 clinical trial of APD334, an oral drug
    candidate that targets the sphingosine 1-phosphate subtype 1 (S1P[1])
    receptor for the potential treatment of various autoimmune diseases. This
    randomized, double-blind and placebo-controlled Phase 1 trial is designed
    to evaluate the safety, tolerability and pharmacokinetics of
    single-ascending doses of APD334.

"We are leveraging our validated research and development capabilities to
continue to build and advance our pipeline of innovative drug candidates,"
said William R. Shanahan, M.D., Arena's Senior Vice President and Chief
Medical Officer. "With APD811 and APD334, we look forward to potentially
expanding the options available to patients and physicians for the treatment
of PAH and certain autoimmune diseases, such as multiple sclerosis, rheumatoid
arthritis and psoriasis."

First Quarter 2013 Financial Results

Arena recognized revenues totaling $2.4 million in the first quarter of 2013,
compared to $2.2million in the first quarter of 2012. The revenue recognized
in 2013 includes a $500,000 milestone payment earned from Eisai upon filing
the BELVIQ MAA in Mexico.

Research and development expenses in the first quarter of 2013 decreased to
$14.0 million, compared to $14.5 million in the first quarter of 2012. General
and administrative expenses in the first quarter of 2013 increased to $7.3
million, compared to $6.4 million in the first quarter of 2012, primarily due
to increases in salaries, patent fees and auditing fees.

Total interest and other income of $2.1 million was recognized in the first
quarter of 2013, compared to an expense of $7.0 million in the first quarter
of 2012. This difference is primarily attributable to a $6.2 million increase
in the value of derivative liabilities, a reduction of $1.7million from the
non-cash loss on extinguishment of debt recorded in the first quarter of 2012
and a $1.2 million reduction in interest expense due to repayment of Arena's
formerly outstanding loan. Arena's net loss allocable to common stockholders
in the first quarter of 2013 was $18.9 million, or $0.09 per share, compared
to $29.4 million, or $0.18 per share, in the first quarter of 2012.

At March 31, 2013, cash and cash equivalents totaled $136.3 million and
approximately 217.7 million shares of common stock were outstanding.

Scheduled Conference Call and Webcast

Arena will host a conference call and webcast to provide a corporate update
and report first quarter 2013 financial results today at 5:15 p.m. Eastern
Time (2:15p.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' First Quarter 2013 Financial Results Call." The conference
call will be webcast live under the investor relations section of Arena's
website at 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

Upcoming Conference Participation

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

  oECO 2013, the 20th European Congress on Obesity, May 12-15, 2013,
    Liverpool, United Kingdom
  oBank of America Merrill Lynch 2013 Health Care Conference, May 14-16,
    2013, Las Vegas, Nevada
  oJefferies 2013 Global Healthcare Conference, June 3-6, 2013, New York, New
  oENDO 2013, the Endocrine Society's 95th Annual Meeting & Expo, June 15-18,
    2013, San Francisco, California
  oAmerican Diabetes Association's 73rd Scientific Sessions, June 21-25,
    2013, Chicago, Illinois

About BELVIQ^® (lorcaserin HCl)

BELVIQ (pronounced BEL-VEEK) is approved in the United States for chronic
weight management, and will be available by prescription in the United States
once the US Drug Enforcement Administration finalizes the scheduling
designation. BELVIQ is also 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 Product Information
or visit

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. Composition of matter
patents for BELVIQ are issued in major jurisdictions globally that, in most
cases, are capable of continuing into 2023. Arena 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, is approved in the United States 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

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, tolerability, selectivity and mechanism of action, and
potential of BELVIQ, APD811 and APD334; the protocol, design, scope,
enrollment and other aspects of the clinical trials of APD811 and APD334; the
significance of the Comprehensive Diabetes Management Algorithm and its
reference to BELVIQ; increasing awareness of BELVIQ; expanding BELVIQ
reimbursement; the DEA scheduling and availability of BELVIQ in the US;
availability of BELVIQ in additional territories, including by entering into
additional collaborations; the regulatory applications and review of BELVIQ,
including intended indication; withdrawing the BELVIQ MAA in the EU and
submitting at a later date; the pipeline of drug candidates, including
building and expansion; patent coverage; 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: the European Medicines Agency's or CHMP's actions, issues,
objections, recommendations or opinions may differ from expectations; whether
or when Arena submits for marketing approval in the EU; regulatory decisions
in one territory may impact regulatory decisions in other territories and
Arena's business prospects; 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

Contact: Arena Pharmaceuticals, Inc.      Media Contact: Russo Partners
Cindy McGee, Vice President,                David Schull, President
Investor Relations & Alliance Management                      858.717.2310
858.453.7200, ext. 1479

Arena Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
                                                     Three months ended

                                                     March 31,
                                                     2013         2012
Manufacturing services                               $ 765       $ 1,292
Collaborative agreements                             1,608        897
 Total revenues                                     2,373        2,189
Operating Expenses
Cost of manufacturing services                       1,645        791
Cost of products sold                                473          0
Research & development                               14,008       14,470
General & administrative                             7,251        6,355
Amortization of acquired technology & other          0            176
 Total operating expenses                           23,377       21,792
Interest & Other Income (Expense)
Interest income                                      24           15
Interest expense                                     (1,787)      (3,031)
Gain (Loss) from valuation of derivative liabilities 3,859        (2,375)
Loss on extinguishment of debt                       0            (1,670)
Other                                                32           87
 Total interest & other income (expense), net       2,128        (6,974)
Net loss                                             (18,876)     (26,577)
Deemed dividend related to beneficial conversion     0            (2,824)
feature of convertible preferred stock
Net loss allocable to common stockholders            $(18,876)    $(29,401)
Net loss per share allocable to common stockholders:
Basic                                                $  (0.09)  $  (0.18)
Diluted                                              $  (0.09)  $  (0.18)
Shares used in calculating net loss per share
allocable to common stockholders:
Basic                                                217,503      164,213
Diluted                                              217,503      164,213

Arena Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet Data
(In thousands)
                                     March 31, 2013      December 31, 2012
                                     (unaudited)         ^1
 Cash & cash equivalents            $ 136,250           $ 156,091
 Accounts receivable                1,484               5,556
 Inventory                          7,179               6,058
 Prepaid expenses & other current   3,756               3,454
 Land, property & equipment, net    73,869              75,417
 Acquired technology & other        14,119              14,630
non-current assets
 Total assets                  $ 236,657           $ 261,206
Liabilities & Stockholders' Equity
 Accounts payable & accrued         $  9,036           $  10,210
 Total deferred revenues            61,781              62,735
 Total derivative liabilities       11,183              15,042
 Total lease financing obligations  74,235              74,580
& other long-term liabilities
 Total stockholders' equity         80,422              98,639
 Total liabilities &           $ 236,657           $ 261,206
stockholders' equity
^1 The Condensed Consolidated Balance Sheet Data has been derived from the
audited financial statements as of that date.

SOURCE Arena Pharmaceuticals, Inc.

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