HAYWARD, CA -- 02/22/2006 -- Aradigm Corporation (NASDAQ: ARDM) today announced financial results for the fourth quarter and year ended December 31, 2005.
The company reported contract revenues for the three months ended December 31, 2005 of $862,000 compared to $8.0 million for the same period in 2004. Contract revenues for the year ended December 31, 2005 were $10.5 million compared with $28.0 million for the same period in 2004. This decrease for the three months and year is due to the restructured license agreement with Novo Nordisk on the AERx Diabetes Management System (iDMS) in January 2005. Revenues for the year ended December 31, 2005, were derived from AERx iDMS activities and other recently partnered AERx development programs. Total operating expenses for the three months ended December 31, 2005 were $11.9 million compared to $14.8 million for the same period in 2004. For the year ended December 31, 2005, total operating expenses were $41.1 million compared with $58.4 million for the same period in 2004. The decrease for the three-month and year ended December 31, 2005 is tied to the transfer of manufacturing costs for the AERx Diabetes Management System to our partner Novo Nordisk following the restructuring of the license agreement in January 2005.
The company reported net loss for the three months ended December 31, 2005 of $10.7 million, or $0.73 per share, compared with a net loss of $6.8 million, or $0.52 per share, for the same period in 2004. The net loss for the year ended December 31, 2005 was $29.2 million, or $2.01 per share, compared with a net loss of $30.2 million, or $2.37 per share, for the same period in 2004. As previously communicated, the cash used in operations during the last three quarters of 2005 is higher than previous quarters reflecting increased spending tied to the commercialization efforts on the Intraject triptan program.
Capital expenditures for the quarter ended December 31, 2005 were $1.3 million, a majority of which represented scheduled purchases related to Intraject commercial production equipment and validation services.
As of December 31, 2005, cash, cash equivalents and short-term investments totaled approximately $27.7 million.
Recent Highlights
- -- In December 2005, we announced the qualification of the supply chain
and production of pivotal clinical batches for our Intraject Sumatriptan
product. This now positions the program for initiation of pivotal clinical
testing once a commercial partner for the product is secured.
- -- In January 2006, we announced a licensing and development deal with an
undisclosed top tier global pharmaceutical company in the area of smoking
cessation. This agreement granted the undisclosed company access to
Aradigm's intellectual property specific to the pulmonary delivery of
nicotine using its patented AERx® technology with the goal of developing
a commercial development program.
"During the quarter, we executed on a key Intraject development milestone and advanced several AERx programs," said Dr. Bryan Lawlis, President and Chief Executive Officer of Aradigm. "Today, Intraject is a fully functioning device, backed by positive clinical data, that we can manufacture at commercial scale. This represents a major achievement in the development of this innovative platform. Partnering discussions for Intraject in the migraine space are continuing and we hope to be able to report a conclusion of an agreement in the next few months."Dr. Lawlis added: "We continue to be pleased with the level of interest in our AERx technology and look forward to advancing our partnered and self-initiated programs in 2006. We are also encouraged by recent comments made by our partner Novo Nordisk regarding our AERx iDMS program in which they indicated that additional Phase 3 trials will start shortly."
Conference Call
The company will host a conference call and question and answer session today at 4:30 pm Eastern Time, 1:30 pm Pacific Time today to discuss these financial results. Dial toll-free 1-877-788-8790 to access the conference call. International callers dial +1 (706) 679-7281. The event webcast can be found under the investor relations section of the company's website: www.aradigm.com. The webcast and audio replay of the conference call will be available following the call, and can be accessed on www.aradigm.com or by dialing toll-free 1 (800) 642-1687. International callers should dial +1 (706) 645-9291. The replay passcode is 5291277#.
Aradigm combines its non-invasive delivery systems with novel formulations to create products that enable patients to comfortably self-administer biopharmaceuticals and small molecule drugs. The company's advanced AERx® pulmonary and Intraject® needle-free delivery technologies offer rapid delivery solutions for liquid drug formulations. Current development programs and priorities focus on the development of specific products, including partnered and self-initiated programs in the areas of respiratory conditions, neurological disorders, heart disorders, smoking cessation, and diabetes. More information about Aradigm can be found at www.aradigm.com.
Except for the historical information contained herein, this news release contains forward-looking statements that involve risk and uncertainties, including clinical results, the timely availability and acceptance of new products, the impact of competitive products and pricing, the availability of funding from partners or capital markets, and the management of growth, as well as the other risks detailed from time to time in Aradigm Corporation's Securities and Exchange Commission (SEC) Filings, including the company's Annual Report on Form 10-K, and quarterly reports on Form 10-Q.
Aradigm, AERx and Intraject are registered trademarks of Aradigm.
ARADIGM CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2005 2004 2005 2004
Unaudited Unaudited Unaudited
--------- ---------
Contract revenues - From
related parties $ 102 $ 7,667 $ 8,013 $ 26,999
Contract revenues - Other 760 305 2,494 1,046
--------- --------- --------- ---------
Total Contract revenues 862 7,972 10,507 28,045
--------- --------- --------- ---------
Operating expenses:
Research and development 9,316 11,771 30,174 46,477
General and administrative 2,621 3,014 10,895 11,934
--------- --------- --------- ---------
Total operating expenses 11,937 14,785 41,069 58,411
--------- --------- --------- ---------
Loss from operations (11,075) (6,813) (30,562) (30,366)
--------- --------- --------- ---------
Interest income 337 34 1,317 194
Other income (expense) 67 1 30 (17)
--------- --------- --------- ---------
Net loss $ (10,671) $ (6,778) $ (29,215) $ (30,189)
========= ========= ========= =========
Basic and diluted net loss
per share* $ (0.73) $ (0.52) $ (2.01) $ (2.37)
Shares used in computing
basic and diluted net
loss per share* 14,563 12,955 14,513 12,741
========= ========= ========= =========
* All share and per share data reflects a 1 for 5 reverse stock split
effective January 4, 2006 and approved by Aradigm shareholders in
January 2005.
ARADIGM CORPORATION
CONDENSED BALANCE SHEETS
(In thousands)
DEC 31, DEC 31,
2005 2004
(Unaudited) **
-------- --------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 27,694 $ 16,763
Receivables 400 99
Current portion of notes receivable from
officers and employees 62 67
Other current assets 874 1,602
-------- --------
Total current assets 29,030 18,531
Property and equipment, net 9,875 60,555
Noncurrent portion of notes receivable from
officers and employees 129 216
Other assets 463 439
-------- --------
Total assets $ 39,497 $ 79,741
======== ========
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,034 $ 2,469
Accrued clinical and cost of other studies 398 293
Accrued compensation 3,814 2,984
Deferred revenue 222 7,525
Other accrued liabilities 475 1,138
-------- --------
Total current liabilities 7,943 14,409
Noncurrent portion of deferred revenue - 3,966
Noncurrent portion of deferred rent 714 1,943
Redeemable convertible preferred stock 23,669 23,669
Shareholders' equity 7,171 35,754
-------- --------
Total liabilities, redeemable convertible
preferred stock and shareholders' equity $ 39,497 $ 79,741
======== ========
** The balance sheet at December 31, 2004 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
Contact: Christopher Keenan Aradigm (510) 265-9370