Arena Reports Third Quarter Financial Results with Strong Cash Position, Advancing Etrasimod Into a Phase 3 Registrational Program in Atopic Dermatitis
SAN DIEGO, Calif., Nov. 9, 2020 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today provided a corporate update and reported financial results for the third quarter ended September 30, 2020.
"Over the quarter we made significant progress across our pipeline - most importantly with the results from the ADVISE trial giving us confidence to move expeditiously into a registrational program. Additionally, we initiated the ELEVATE UC 12, GLADIATOR UC and alopecia areata trials. We completed enrollment of the CAPTIVATE Phase 2b trial for olorinab, keeping us on track for expected topline data in Q1. In addition, we have completed the Phase 1 trial of APD418 and have plans to initiate our Phase 2 program in 2021. We also successfully spun-off our neurology franchise with the inception of Longboard Pharmaceuticals, to help unlock the value of those assets," said Amit D. Munshi, President and CEO of Arena. "We are optimistic about the next 12-18 months as we continue our efforts to build long-term value for all of our stakeholders and execute on key catalysts."
Program Updates
-- Etrasimod atopic dermatitis (AD) ADVISE Phase 2b trial delivered topline
results; moving forward into a Phase 3 registrational program
-- Etrasimod ELEVATE UC 52 Phase 3 trial in ulcerative colitis (UC) ongoing
and on track to complete enrollment by year-end 2020, with the 52-week
treatment period ending by year-end 2021 and data expected shortly
thereafter; ELEVATE UC 12 Phase 3 trial was initiated, continues to make
strong progress with data expected in the same timeframe as UC 52; we
continue to monitor the impact of the COVID-19 resurgence on study
enrollment for both UC 52 and UC 12
-- Etrasimod GLADIATOR UC Phase 2 planning; initiation expected in Q1 2021
dependent on COVID-19 impact
-- Etrasimod CULTIVATE Phase 2/3 trial in Crohn's disease (CD) ongoing;
confirming topline dose-ranging data in 2021; continue to suspend
overall program guidance based on COVID-19 impact
-- Etrasimod eosinophilic esophagitis (EoE) Phase 2b VOYAGE trial with
initiation expected in 2020 but dependent on COVID-19 impact
-- Etrasimod alopecia areata (AA) Phase 2 initiated; topline data expected
H2 2021
-- Olorinab CAPTIVATE Phase 2b trial in abdominal pain associated with
irritable bowel syndrome (IBS-C, IBS-D) enrollment completed; topline
data expected Q1 2021
-- APD418 in acute heart failure (AHF) with Fast Track designation;
completed the first-in-human Phase 1 trial; APD418 was generally well
tolerated; Phase 2 planning ongoing
Business Update
-- In October 2020, Arena announced the launch and the completion of a $56
million financing of Longboard (formerly Arena Neuroscience), an
independent company focused on advancing investigational therapies for
rare neurological diseases. Arena shareholders will continue to
participate in the value of these assets via Arena's equity position in
the new company and potential future royalty streams.
Financial Update
Third Quarter 2020 Financial Results
-- Revenues for the third quarter were $20,000 compared to $1.4 million in
the third quarter of 2019
-- Research and development (R&D) expenses for the third quarter totaled
$79.8 million compared to $60.3 million in the same period 2019. This
increase was primarily driven by our advancing clinical studies,
including the etrasimod Phase 3 program, as well as an increase in
personnel expenses as we staff to support our clinical programs. The R&D
non-cash, share-based compensation was $6.6 million in the third quarter
as compared to $6.7 million in the same period 2019
-- Selling, general and administrative (SG&A) expenses for the third
quarter totaled $19.0 million, compared to $20.4 million in the third
quarter of 2019. This decrease was primarily driven by a decrease in
legal, accounting and other professional fees partially offset by an
increase in personnel expenses. The SG&A non-cash, share-based
compensation was $5.8 million in the third quarter as compared to $6.6
million in the same period 2019
-- Net loss for the third quarter was $97.4 million compared to net loss of
$72.9 million for the same period in 2019
-- Basic and diluted net loss per share for the third quarter was $1.69
compared to basic and diluted net loss per share of $1.46 for the same
period in 2019
-- Cash, cash equivalents and marketable securities were $1.2 billion at
September 30, 2020, as compared to $1.3 billion at June 30, 2020
Financial Outlook for 2020
Arena's 2020 financial guidance range:
-- Cash used in operating activities for the full-year 2020 is expected to
be $345 to $355 million, down compared to our previous guidance of $400
to $430 million. Arena continues to achieve key milestones while 2020
full-year operating expenses decrease due to clinical trial efficiency
and continued focus on optimizing spend
Conference Call & Webcast Information
Arena will host a conference call and live webcast the investment community today, Monday, November 9, 2020, at 4:30 PM ET, to discuss the financial results and corporate update.
When: Monday, November 9, 2020, at 4:30 PM ET
Dial-in: (877) 643-7155 (United States) or (914) 495-8552 (International)
Conference ID: 6166976
Please join the conference call at least 20 minutes early to register. You can access the live webcast under the investor relations section of Arena's website at: www.arenapharm.com. A replay of the event will be archived under the investor relations section of Arena's website for 30 days shortly after the call.
About Arena Pharmaceuticals
ARENA Pharmaceuticals is a team with a singular purpose - deliver our important medicines to patients.
In a rapidly changing global market, we work with a sense of urgency every day to understand the needs of all our stakeholders, identify bold, sometimes disruptive, ideas to get our medicines to patients, and relentlessly execute until it's done.
ARENA - Care More. Act Differently.
Etrasimod, olorinab and APD418 are investigational compounds that are not approved for any use in any country.
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 may be identified by words such as "expected," "will," "long-term," "outlook," and "guidance" and include, without limitation, statements about the following: Arena's clinical programs, including plans to advance etrasimod into a registrational program in atopic dermatitis, expectations regarding enrollment of study participants and the timing of data readouts for ongoing and anticipated trials, and expectations for the commencement of additional trials; the statements under "Program Updates" above; and Arena's financial outlook and guidance, including expectations regarding cash to be used in operating activities and the rate of change thereof. 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: topline data may not accurately reflect the complete results of a particular study or trial; 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; the timing and outcome of research, development and regulatory review is uncertain, and Arena's drug candidates may not advance in development or be approved for marketing; enrolling patients in Arena's ongoing and intended clinical trials is competitive and challenging; the duration and severity of the coronavirus disease (COVID-19) pandemic, including but not limited to the impact on Arena's clinical operations, the operations of Arena's suppliers, partners, collaborators, licensees, and capital markets, which in each case remains uncertain; risks related to developing and commercializing drugs; Arena will need additional funds to advance all of its programs; the impact of competition; risks related to unexpected or unfavorable new data; the risk that 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; satisfactory resolution of litigation or other disagreements with others; and risks related to the enforcement of Arena's and third parties' intellectual property rights. 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 (SEC), including but not limited to Arena's Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on February 27, 2020, and Arena's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, which was filed with the SEC on August 5, 2020. 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.
Corporate Contacts:
Patrick Malloy
Arena Pharmaceuticals, Inc.
Vice President, Investor Relations & Corporate Communications
pmalloy@arenapharm.com
847.987.4878
Megan E. Knight
Arena Pharmaceuticals, Inc.
Director, Investor Relations
mknight@arenapharm.com
858.210.3635
(Tables Follow)
Arena Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three months ended
Nine months ended
September 30,
September 30,
2020 2019 2020 2019
(unaudited)
(unaudited)
Revenues
United Therapeutics revenue
$
$
$ $
800,000
Royalty revenue 811 262 2,725
Collaboration and other revenue 20 539 20 704
Total revenues 20 1,350 282 803,429
Operating Costs & Expenses
Research & development 79,820 60,257 223,299 156,864
Selling, general & administrative 19,002 20,428 68,321 55,373
Transaction costs 14,573
Total operating costs & expenses 98,822 80,685 291,620 226,810
Income (loss) from operations (98,802) (79,335) (291,338) 576,619
Total interest & other income (expense), net 1,364 6,470 8,765 19,580
Income (loss) before income taxes (97,438) (72,865) (282,573) 596,199
Income tax provision (110,333)
Net income (loss) $
(97,438) $
(72,865) $
(282,573) $
485,866
Net income (loss) per share, basic: $
(1.69) $
(1.46) $
(5.27) $
9.78
Net income (loss) per share, diluted: $
(1.69) $
(1.46) $
(5.27) $
9.39
Shares used in calculating net income (loss) per share, basic: 57,779 49,864 53.608 49,667
Shares used in calculating net income (loss) per share, diluted: 57,779 49,864 53,608 51,763
Arena Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet Data
(In thousands)
(Unaudited)
September 30, 2020 December 31, 2019
(1)
Assets
Cash & cash equivalents $
460,145 $
243,274
Prepaid expenses & other current assets 34,383 20,369
Total available-for-sale investments 741,005 867,229
Land, property & equipment, net 22,913 25,128
Other non-current assets 17,097 18,123
Total assets $
1,275,543 $
1,174,123
Liabilities & Stockholders' Equity
Accounts payable & accrued liabilities $
47,647 $
41,153
Total lease financing obligations & other long-term liabilities 57,969 61,505
Total stockholders' equity 1,169,927 1,071,465
Total liabilities & stockholders' equity $
1,275,543 $
1,174,123
(1)
The Condensed Consolidated Balance Sheet Data has been derived from the audited financial statements as of that date.
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SOURCE Arena Pharmaceuticals, Inc.
