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

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

-- Arena and Eisai Expand Marketing and Supply Agreement for BELVIQ®
(lorcaserin HCl) to Include Most Countries Worldwide --

-- Conference Call and Webcast Rescheduled to Tomorrow at 8:30 a.m. Eastern
Time --

PR Newswire

SAN DIEGO, Nov. 7, 2013

SAN DIEGO, Nov. 7, 2013 /PRNewswire/ --Arena Pharmaceuticals, Inc. (NASDAQ:
ARNA) today provided a corporate update and reported financial results for the
third quarter ended September 30, 2013. Arena has also rescheduled its
conference call and webcast to tomorrow, November 8, 2013, at 8:30 a.m.
Eastern Time (5:30 a.m. Pacific Time).

"We are excited by our expanded agreement with Eisai and look forward to
collaborating as we focus on the global registration and commercialization of
BELVIQ for weight management and the development of potential new
indications," said Jack Lief, Arena's President and Chief Executive Officer.
"Our third quarter results reflect the first full quarter since BELVIQ became
available in US pharmacies. Additional work is needed to continue building the
weight management market, and we are pleased with Eisai's commitment to
realizing the medical and commercial potential of BELVIQ. We look forward to
the market growth of this important treatment option as we move into 2014."

Recent Developments:

BELVIQ ^ Rest of World

  oArena and Eisai expanded the BELVIQ ^ marketing and supply agreement to
    provide Eisai with exclusive commercialization rights for all countries
    worldwide, except for South Korea, Taiwan, Australia, Israel and New
    Zealand. Under the terms of the agreement, Arena will receive an upfront
    payment of $60 million from Eisai.

BELVIQ US Launch

  oEisai announced plans to double the BELVIQ sales force to approximately
    400 representatives by December 2013, which is intended to enable Eisai to
    reach approximately 65,000 physicians in the US.

  oEisai reported that, according to BusinessOne Technologies, Inc., BELVIQ
    is now covered by several prominent health plans and pharmacy benefit
    managers, including Express Scripts. Eisai also reported that it is in
    active discussions with major payors to further improve the reimbursement
    landscape.

  oEisai launched a direct-to-consumer print advertisement campaign in major
    US magazines. The advertisements include a 15-day free trial voucher for
    BELVIQ.

  oEisai launched www.BELVIQhcp.com, which features information about BELVIQ
    and provides resources for healthcare professionals, and the BELIEVE
    EVERYDAY SUPPORT^SM program at www.BelieveSupport.com, which provides
    comprehensive support and savings for patients treated with BELVIQ.

  oIn the third quarter of 2013, Arena recognized 31.5% of Eisai's net
    product sales (which were $5.4 million), or $1.7 million, as well as $0.3
    million related to redemptions of the 15-day free trial voucher. Arena and
    Eisai currently recognize revenue of BELVIQ net product sales when Eisai
    ships product to its wholesalers.

Research & Development

  oUnder the terms of their expanded marketing and supply agreement, Eisai
    and Arena will now jointly investigate the potential of lorcaserin in new
    areas, such as smoking cessation, a once-daily formulation, a fixed-dose
    combination with phentermine, as well as explore BELVIQ's impact on
    diabetes and cardiovascular outcomes.

     oArena completed a study to evaluate the safety, tolerability and
       pharmacokinetic properties of single doses of lorcaserin 10 mg and
       phentermine 15 mg when administered in combination.

     oArena initiated a study in September 2013 to evaluate the safety,
       tolerability and pharmacokinetic properties of single doses of
       lorcaserin 20 mg extended release tablets.

  oArena completed a Phase 1 multiple-dose clinical trial of APD811, an oral
    drug candidate intended for the treatment of pulmonary arterial
    hypertension.

Third Quarter 2013 Financial Results

  oRevenues totaled $3.6 million, including $2.0 million in net product sales
    of BELVIQ.
  oResearch and development expenses totaled $14.6 million.
  oGeneral and administrative expenses totaled $7.8 million.
  oNet loss allocable to common stockholders was $17.2 million, or $0.08 per
    share.
  oAt September 30, 2013, cash and cash equivalents totaled $180.7 million,
    which does not include the $60.0 million upfront payment Arena will
    receive from Eisai in conjunction with the expanded agreement.
  oAt September 30, 2013, approximately 218.6 million shares of common stock
    were outstanding.

Nine Months Ended September 30, 2013 Financial Results

  oRevenues totaled $74.9 million, including $66.0 million in milestone
    payments from Eisai and $3.3 million in net product sales.
  oResearch and development expenses totaled $47.4 million.
  oGeneral and administrative expenses totaled $23.6 million.
  oNet income allocable to common stockholders was $4.0 million, or $0.02 per
    share.

Conference Call and Webcast Rescheduled

Arena will host a conference call and webcast to provide a corporate update,
including on the expanded BELVIQ marketing and supply agreement with Eisai,
and report third quarter 2013 financial results tomorrow at 8:30 a.m. Eastern
Time (5:30 a.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 and Third Quarter 2013 Financial Results
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.

Upcoming Corporate Presentations

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

  oObesityWeek 2013, November 11-16, 2013, Atlanta, Georgia
  oAmerican Heart Association Scientific Sessions 2013, November 16-20, 2013,
    Dallas, Texas
  o25th Annual Piper Jaffray Healthcare Conference, December 3-4, 2013, New
    York, New York
  o32nd Annual J.P. Morgan Healthcare Conference, January 13-16, 2014, San
    Francisco, California

About BELVIQ^® (lorcaserin HCl) CIV

BELVIQ (pronounced BEL-VEEK) is approved by the US Food and Drug
Administration for chronic weight management and is available by prescription
in the United States. BELVIQ ^ is believed to decrease food consumption and
promote satiety by selectively activating serotonin 2C receptors in the brain.
The exact mechanism of action is not known. For more information about BELVIQ,
click here for the full Product Information or visit www.BELVIQ.com.

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 body mass index 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.

Arena has granted exclusive marketing and distribution rights to Eisai for
most territories worldwide, to Ildong Pharmaceutical Co., Ltd., for South
Korea, and to CY Biotech Company Ltd. for Taiwan. Arena plans to enter into
additional collaborations to commercialize BELVIQ outside of these
territories.

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
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, and
potential of BELVIQ or lorcaserin; the expanded agreement with Eisai, the
significance of such agreement and related expectations and plans, including
payments, product development (including potential indications and
formulations), registration and commercialization; building the weight
management market and the market growth of BELVIQ; Eisai's commitment; the
expansion of the BELVIQ sales force, including the number of representatives,
related timing and expectations and significance; reimbursement coverage of
BELVIQ, including efforts to further improve coverage; marketing activities,
including with respect to product education, awareness and interest and
patient support; the therapeutic indication of APD811 and related
expectations; plans to enter into additional collaborations and the
commercialization of BELVIQ in additional territories; 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 the implementation and continuation of the
Second Amended Agreement and dependence on collaborators; the timing and
receipt of payments and fees, if any, from collaborators; risks related to
commercializing drugs, including regulatory, manufacturing and supply issues
and the availability and use of BELVIQ; cash and revenues generated from
BELVIQ, including the impact of competition; Arena's revenues will be based in
part on estimates, judgment and accounting policies, and incorrect estimates
or disagreement regarding 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 in combination with another drug, for another
indication or using a different formulation or in any other territory for any
indication; regulatory decisions in one territory may impact other regulatory
decisions and Arena's business prospects; government and commercial
reimbursement and pricing decisions; 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 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; 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.

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



Arena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)
                             Three months ended        Nine months ended
                                                       September 30,
                             September 30,
                             2013         2012         2013       2012
                             (unaudited)               (unaudited)
Revenues
Net product sales            $   2,011  $    0    $ 3,330   $    0
Eisai collaborative revenue  973          864          68,933     22,642
Manufacturing services       443          603          2,181      2,924
Other collaborative revenue  151          18           434        85
 Total revenues             3,578        1,485        74,878     25,651
Operating Costs & Expenses
Cost of product sales        460          0            1,514      0
Cost of manufacturing        632          1.396        3,286      2,839
services
Research & development       14,592       11,619       47,428     40,165
General & administrative     7,760        7,392        23,614     18,963
Amortization of acquired
technology & other           0            168          0          517
intangibles
 Total operating costs &    23,444       20,575       75,842     62,484
expenses
Interest & Other Income
(Expense)
Interest income              28           41           68         81
Interest expense             (1,768)      (1,804)      (5,333)    (7,324)
Gain (Loss) from valuation   4,100        5,259        10,101     (13,886)
of derivative liabilities
Loss on extinguishment of    0            0            0          (6,338)
debt
Other                        306          73           152        103
 Total interest & other     2,666        3,569        4,988      (27,364)
income (expense), net
Net income (loss)            (17,200)     (15,521)     4,024      (64,197)
Deemed dividend related to
beneficial conversion        0            0            0          (2,824)
feature of convertible
preferred stock
Net income (loss) allocable  $(17,200)    $(15,521)    $ 4,024   $(67,021)
to common stockholders
Net income (loss) per
share allocable to common
stockholders:
Basic                        $  (0.08)  $  (0.07)  $  0.02  $  (0.35)
Diluted                      $  (0.08)  $  (0.07)  $  0.02  $  (0.35)
Shares used in calculating
net income (loss) per share
allocable to common
stockholders:
Basic                        218,316      213,881      217,923    189,545
Diluted                      218,316      213,881      224,354    189,545

Arena Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheet Data

(In thousands)
                                     September 30, 2013     December 31, 2012
                                     (unaudited)            ^1
Assets
 Cash & cash equivalents            $ 180,703              $ 156,091
 Accounts receivable                12,379                 5,556
 Inventory                          10,039                 6,058
 Prepaid expenses & other current   3,441                  3,454
assets
 Land, property & equipment, net    74,484                 75,417
 Acquired technology & other        13,657                 14,630
non-current assets
 Total assets                  $ 294,703              $ 261,206
Liabilities & Stockholders' Equity
 Accounts payable & accrued         $  28,684             $  10,210
liabilities
 Total deferred revenues            75,551                 62,735
 Total derivative liabilities       4,941                  15,042
 Total lease financing obligations  73,455                 74,580
& other long-term liabilities
 Total stockholders' equity         112,072                98,639
 Total liabilities &           $ 294,703              $ 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.

Website: http://www.arenapharm.com
 
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