Aradigm Announces Second Quarter 2013 Financial Results

  Aradigm Announces Second Quarter 2013 Financial Results

Business Wire

HAYWARD, Calif. -- August 8, 2013

Aradigm Corporation (OTC BB: ARDM.OB) (the “Company”)  today announced
financial results for the second quarter and six months ended June 30, 2013.

Total revenue was approximately $0.2 million for both the second quarter of
2013 and the second quarter of 2012. Revenue in both quarters reflects the
quarterly royalty payment from Zogenix for product sales of SUMAVEL® DosePro™
needle-free delivery system for treatment of acute migraine and cluster

The Company’s net loss for the second quarter of 2013 was approximately $2.7
million, or $0.01 per share, compared with a net loss of approximately $1.8
million, or $0.01 per share, for the second quarter of 2012. Total operating
expenses for the second quarter of 2013 were approximately $2.5 million,
compared with total operating expenses of approximately $1.6 million for the
second quarter of 2012. The increase in operating expenses was primarily due
to higher R&D expenses from the 9 month inhalation study in dogs associated
with the Company’s inhaled ciprofloxacin program.

As of June 30, 2013, cash, cash equivalents and short-term investments totaled
approximately $2.7 million.

Recent Highlights

  *May 2013: announced the signing of a license agreement with Grifols, S.A.
    for Pulmaquin® and Lipoquin® and associated stock sale. On May20, 2013,
    the Company and Grifols and certain other investors entered into a Stock
    Purchase Agreement in which the Company agreed to sell a total of
    209,774,558 shares of the Company’s common stock to Grifols and an
    additional 124,193,546 shares of Common Stock to the investors, for a
    total sale of 333,968,104 shares of common stock for a purchase price of
    $0.124 per share. The aggregate gross consideration payable to the Company
    in the stock sale is approximately $41.4 million. In conjunction with
    signing the Stock Purchase Agreement, the Company and Grifols agreed to
    enter into a License and Collaboration Agreement at the closing of the
    Company Stock Sale. The License Agreement would exclusively license the
    Company’s inhaled liposomal ciprofloxacin compounds for the indication of
    non-cystic fibrosis bronchiectasis and other indications to Grifols on a
    worldwide basis. Grifols would fund development expenses (capped at $65
    million for the first indication), commercialize products from the
    program, pay up to $25 million in development milestones and also pay
    royalties on future commercial sales of products. The conditions to the
    closing of the transaction include obtaining shareholder approval of the
    transaction and securing a binding term sheet or agreement with a third
    party relating to the manufacture of products which may be commercialized
    under the License Agreement.
  *July 2013: shareholders approve the Grifols transaction at the Special
    Meeting of Shareholders. The Company held a special meeting of its
    shareholders on July 15, 2013 to (i)approve amendments to the Company’s
    charter, including amendments necessary to increase the total number of
    shares of common stock authorized to be issued by the Company to at least
    706,830,627 shares, including the 333,968,104 shares to be sold in the
    company stock sale and (ii)to approve the Company’s closing of the
    Company Stock Sale and entering into the License Agreement, Governance
    Agreement and other agreements described in the Stock Purchase Agreement .
    Shareholders of the Company holding more than 50% of the outstanding
    shares of the Company’s common stock voted in favor of these proposals at
    the special meeting.
  *August 2013: announced NIH grant for PNTM. The National Institutes of
    Health (NIH) awarded the Company a Small Business Initiative Research
    (SBIR) grant in the amount of approximately $278,000 to investigate the
    treatment of pulmonary non-tuberculous mycobacteria (PNTM) infections with
    Aradigm’s inhaled liposomal ciprofloxacin products Pulmaquin and Lipoquin.
    The research program will be conducted in collaboration with Oregon State
    University, Corvalis.
  *August 2013: announced NIH grant for new methods of diagnoses of
    aspirations of gastrointestinal contents into the respiratory tract. The
    NIH awarded the Company an SBIR grant in the amount of approximately
    $260,000 to investigate the development and validation of tests for
    gastro-esophageal reflux with aspirations into the respiratory tract. The
    research program will be conducted in collaboration with scientists at the
    University of California, San Francisco (UCSF). The funding is for
    laboratory work and a human clinical trial to be conducted at UCSF.

About Aradigm

Aradigm is an emerging specialty pharmaceutical company focused on the
development and commercialization of drugs delivered by inhalation for the
prevention and treatment of severe respiratory diseases by pulmonologists. The
Company has product candidates addressing the treatment of bronchiectasis,
cystic fibrosis, inhalation tularemia and anthrax infections, and prevention
of respiratory and other diseases in tobacco smokers through smoking

More information about Aradigm can be found at

Forward-Looking Statements

Except for the historical information contained herein, this news release
contains forward-looking statements, including, but not limited to, statements
regarding the Grifols transaction, the product development efforts for the
inhaled ciprofloxacin program and continued receipt of royalties from Zogenix,
Inc. These forward-looking statements involve risk and uncertainties, 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, 2012 filed with the SEC on
March 27, 2013, and the Company’s Quarterly Reports on Form 10-Q.

Aradigm, the Aradigm Logo, Pulmaquin and Lipoquin are registered trademarks of
Aradigm Corporation.

(In thousands, except per share data)
                       Three months ended              Six months ended
                       June 30,                        June 30,
                       2013          2012            2013          2012
Revenues               $ 248        $ 240          $ 527        $ 522     
Research and             1,423           700             3,407           1,486
General and              1,118           913             2,338           1,996
Restructuring and        7               9               14              18
asset impairment
Total operating         2,548       1,622         5,759       3,500   
Loss from                (2,300  )       (1,382  )       (5,232  )       (2,978  )
Interest income          1               3               3               7
Interest expense         (407    )       (382    )       (801    )       (752    )
Other income             (4      )       -               (5      )       2
(expense), net
Net loss               $ (2,710  )     $ (1,761  )     $ (6,035  )     $ (3,721  )
Change in
unrealized losses
on                       -               -               -               (1      )
Comprehensive loss     $ (2,710  )   $ (1,761  )     $ (6,035  )   $ (3,722  )
Basic and diluted
net loss per           $ (0.01   )   $ (0.01   )     $ (0.02   )   $ (0.02   )
common share
Shares used in
computing basic
and diluted net         250,417     198,406       250,180     198,166 
loss per common

(In thousands)
                                     June 30,                 December 31,
                                     2013                     2012
                                     (Unaudited)            *
Current assets:
Cash and cash equivalents            $   1,693                $   7,414
Short-term investments                   1,011                    203
Receivables                              59                       41
Prepaid and other current                220                      106
Total current assets                     2,983                    7,764
Property and equipment, net              549                      727
Other assets                             420                      475
Total assets                         $   3,952             $   8,966    
Current liabilities:
Accounts payable                     $   798                  $   330
Accrued clinical and cost of             234                      500
other studies
Accrued compensation                     297                      184
Facility lease exit                      155                      144
Other accrued liabilities               425                  127      
Total current liabilities                1,909                    1,285
Deferred rent                            144                      144
Facility lease exit                      390                      465
obligation, non-current
Note payable, net of
discount and accrued                     8,742                    8,513
Shareholders' deficit                    (7,233   )               (1,441   )
Total liabilities and                $   3,952             $   8,966    
shareholders' deficit

* The balance sheet at December 31, 2012 has been derived from the audited
financial statements at that date.


Aradigm Corporation
Nancy Pecota, 510-265-8800
Chief Financial Officer
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