On August 14, 2018 Aradigm Corporation (NASDAQ: ARDM) (the "Company") reported financial results for the second quarter and six months ended June 30, 2018 (Press release, Aradigm, AUG 14, 2018, View Source [SID1234529247]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Second Quarter 2018 Financial Results
The Company recorded $256,000 in revenue in the second quarter of 2018 compared with $7.7 million in revenue in the second quarter of 2017. The Company recognized $96,000 in contract revenue – related party, $95,000 in government contract revenue and $65,000 in government grant revenue for the second quarter of 2018, as compared to $7.5 million in contract revenue – related party, $196,000 in government contract revenue and $7,000 in government grant revenue for the second quarter of 2017.
Total operating expenses for the second quarter of 2018 were $3.0 million, compared with total operating expenses of $5.7 million for the second quarter of 2017. The decrease in research and development expenses of $2.1 million was due to a decrease in spend in support of the Linhaliq regulatory process towards US and EU approvals for market authorization and lower employee-related expenses due to a reduction in headcount. The decrease in general and administrative expenses of $0.5 million was primarily related to lower legal expenses, lower expenses for Board of Director fees and lower employee-related expenses due to a reduction in headcount.
Net loss for the second quarter of 2018 was $3.8 million or $(0.25) per share, compared with a net income of $1.0 million or $0.07 per share in the second quarter of 2017. For the quarter ended June 30, 2018, the shift to a net loss from net income resulted primarily from a decrease in revenue of $7.4 million and a decrease in operating expenses of $2.7 million.
Liquidity and Capital Resources and Related Matters
As of June 30, 2018, the Company reported cash and cash equivalents of $2.1 million.
In January, Aradigm received a Complete Response Letter (CRL) from the FDA regarding the New Drug Application (NDA) for Linhaliq as a treatment for non-cystic fibrosis bronchiectasis NCFBE patients with chronic lung infections with Pseudomonas aeruginosa (P. aeruginosa).
The CRL states that the FDA has determined that it cannot approve the NDA in its present form and provides specific reasons for this action along with recommendations needed for resubmission; the areas of concern include clinical data, human factor validation study and product quality. We remain confident in the efficacy, safety and quality of Linhaliq (now named Apulmiq for the FDA) and are formally interacting with the FDA to discuss the topics covered in the CRL with the goal of developing plans to move towards resubmission of the Linhaliq NDA as soon as possible. We are committed to continuing to work on obtaining regulatory approval of Linhaliq in the US for NCFBE patients who suffer from this very severe disease which carries a burden of high morbidity and mortality with no treatment options.
The Aradigm Board of Directors approved temporary measures on February 9, 2018 intended to preserve the Company’s cash resources.
During the quarter ended June 30, 2018 Aradigm raised $4.0 million through the issuance of bridge notes and obtained commitments for additional monthly funding through September of 2018 totaling approximately $3.0 million. This $3.0 million along with the cash balance of $2.1 million will be sufficient to fund operations through the third quarter of 2018.
Aradigm is pursuing potential alternatives to resolve our cash position in the short term as well as developing strategic options that would provide for our long term viability. We feel it is very important to bring Linhaliq to commercialization in as many countries as possible to allow patients suffering from (NCFBE) to receive the benefits of Linhaliq. Patients, patient advocacy groups and key opinion leaders have expressed support for regulatory approval of Linhaliq as we work towards this goal. The MAA was filed on March 8, 2018 followed by the EMA validation of the MAA. The EMA review of the MAA for Linhaliq will be according to standard timelines, with an opinion of the Committee for Medicinal Products for Human Use (CHMP) expected within 210 days from the formal procedural start date of March 29, 2018. The time needed by us to respond to EMA questions during the MAA review will trigger formal clock-stops of the procedure and may add several months to the nominal 210 day duration, until the final CHMP opinion will be issued.
About Non-Cystic Fibrosis Bronchiectasis
NCFBE is a severe, chronic and rare disease characterized by abnormal dilatation of the bronchi and bronchioles, frequently associated with chronic lung infections. It is often a consequence of a vicious cycle of inflammation, recurrent lung infections, and bronchial wall damage. NCFBE represents an unmet medical need with high morbidity and mortality that affects more than 150,000 people in the US. and over 200,000 people in Europe. There is currently no drug approved for the treatment of this condition.