Arena Announces Corporate Update and Reports First Quarter 2020 Financial Results

On May 7, 2020 Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) reported financial results for the first quarter ended March 31, 2020 (Press release, Arena Pharmaceuticals, MAY 7, 2020, View Source [SID1234557397]).

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"We are pleased to announce that our ongoing clinical programs are currently on track and our liquidity position remains strong with approximately one billion dollars in cash and investments. While maintaining momentum has not been easy, and we – along with the rest of the industry – have experienced a slowing in clinical trial operations, including site activations, our teams have been actively monitoring our ongoing trials day-by-day to ensure patient safety, study momentum and conduct, and drug supply. Additionally, prior to the COVID-19 outbreak, our programs were well ahead of schedule, giving us an important buffer to weather the storm. Finally, given the broad clinical site base across our programs, we are also monitoring certain countries and regions as they begin to lift restrictions. We continue to evaluate the situation in real-time and we will provide further updates frequently as circumstances evolve," said Amit D. Munshi, President and CEO of Arena.

Mr. Munshi added, "In the meantime, as we navigate the difficult and uncertain global conditions, we are taking measures to slow down hiring and spend in non-clinical areas, ensuring that we are highly focused on our key clinical objectives. We continue to judiciously manage cash and explore ways to reduce burn without impacting the long-term value of Arena or the delivery of critical milestones."

Financial Update

First Quarter 2020 Financial Results

Revenues for the first quarter totaled $0.3 million compared to $801.1 million in the first quarter of 2019. This decrease was driven by the $800.0 million upfront payment from the United Therapeutics transaction in the first quarter of 2019
Research and development (R&D) expenses for the first quarter totaled $78.5 million compared to $45.4 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 first quarter as compared to $6.7 million in the same period 2019
General and administrative (G&A) expenses for the first quarter totaled $26.4 million, compared to $16.6 million in the first quarter of 2019. This increase is primarily attributed to personnel expenses including share-based compensation. The G&A non-cash share-based compensation was $8.6 million in the first quarter as compared to $6.3 million in the same period 2019
Net loss for the first quarter was $100.2 million compared to net income of $620.1 million for the same period in 2019. In connection with the United Therapeutics transaction we incurred transaction fees of approximately $17.0 million, of which $14.6 million was incurred in the first quarter of 2019, and was presented as transaction costs in the condensed consolidated statement of operations
Basic and diluted net loss per share for the first quarter 2020 was $2.00 compared to basic net income per share of $12.53 and diluted net income per share of $12.11 for the same period in 2019
Cash, cash equivalents and marketable securities were $1.0 billion at March 31, 2020, as compared to $1.1 billion at December 31, 2019
Financial Outlook for 2020
Arena updated its 2020 financial guidance ranges:

Cash used in operating activities for the full-year 2020 is expected to be $400 million to $430 million, down compared to our previous guidance of $95 million in the first quarter, with a subsequent quarter over quarter increase in the high single-digits to low double-digits
Conference Call & Webcast Information
Arena will host a live and webcast question and answer session via conference call and live webcast with the investment community today, Thursday, May 7, 2020, at 4:30 PM ET to discuss the financial results and provide a corporate update.

When: Thursday, May 7, 2020, at 4:30 PM ET
Dial-in: (877) 643-7155 (United States) or (914) 495-8552 (International)
Conference ID: 4171767

Please join the conference call at least 15 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.